Correlation Between De Grey and Green Technology

Can any of the company-specific risk be diversified away by investing in both De Grey and Green Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining De Grey and Green Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between De Grey Mining and Green Technology Metals, you can compare the effects of market volatilities on De Grey and Green Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in De Grey with a short position of Green Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Green Technology.

Diversification Opportunities for De Grey and Green Technology

-0.18

Correlation Coefficient

De Grey  Green Technology

Good diversification

The 3 months correlation between DEG and Green is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology Metals and De Grey is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on De Grey Mining are associated (or correlated) with Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of De Grey i.e., De Grey and Green Technology go up and down completely randomly.

Pair Corralation between De Grey and Green Technology

Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.31 times more return on investment than Green Technology. However, De Grey Mining is 3.23 times less risky than Green Technology. It trades about 0.01 of its potential returns per unit of risk. Green Technology Metals is currently generating about -0.01 per unit of risk. If you would invest  197.00  in De Grey Mining on December 1, 2024 and sell it today you would earn a total of  0.00  from holding De Grey Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

De Grey Mining  vs.  Green Technology Metals

De Grey Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days De Grey Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, De Grey is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Green Technology Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Technology Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Green Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with De Grey and Green Technology

The main advantage of trading using opposite De Grey and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Green Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Green Technology will offset losses from the drop in Green Technology's long position.

The idea behind De Grey Mining and Green Technology Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.