Correlation Between Globex Mining and Green Shift

Can any of the company-specific risk be diversified away by investing in both Globex Mining and Green Shift 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 Globex Mining and Green Shift into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globex Mining Enterprises and Green Shift Commodities, you can compare the effects of market volatilities on Globex Mining and Green Shift 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 Globex Mining with a short position of Green Shift. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Green Shift.

Diversification Opportunities for Globex Mining and Green Shift

-0.23

Correlation Coefficient

Globex Mining  Green Shift

Very good diversification

The 3 months correlation between Globex and Green is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Green Shift Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Shift Commodities and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Green Shift. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Shift Commodities has no effect on the direction of Globex Mining i.e., Globex Mining and Green Shift go up and down completely randomly.

Pair Corralation between Globex Mining and Green Shift

Assuming the 90 days horizon Globex Mining Enterprises is expected to generate 0.3 times more return on investment than Green Shift. However, Globex Mining Enterprises is 3.29 times less risky than Green Shift. It trades about 0.12 of its potential returns per unit of risk. Green Shift Commodities is currently generating about 0.02 per unit of risk. If you would invest  82.00  in Globex Mining Enterprises on December 28, 2024 and sell it today you would earn a total of  21.00  from holding Globex Mining Enterprises or generate 25.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Globex Mining Enterprises  vs.  Green Shift Commodities

Globex Mining Enterprises

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Globex Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Green Shift Commodities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Green Shift Commodities are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Green Shift may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Globex Mining and Green Shift

The main advantage of trading using opposite Globex Mining and Green Shift positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Green Shift 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 Shift will offset losses from the drop in Green Shift's long position.

The idea behind Globex Mining Enterprises and Green Shift Commodities 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.