Correlation Between Green Shift and Red Moon
Can any of the company-specific risk be diversified away by investing in both Green Shift and Red Moon 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 Green Shift and Red Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Shift Commodities and Red Moon Resources, you can compare the effects of market volatilities on Green Shift and Red Moon 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 Green Shift with a short position of Red Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Shift and Red Moon.
Diversification Opportunities for Green Shift and Red Moon
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Red is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Green Shift Commodities and Red Moon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Moon Resources and Green Shift 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 Green Shift Commodities are associated (or correlated) with Red Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Moon Resources has no effect on the direction of Green Shift i.e., Green Shift and Red Moon go up and down completely randomly.
Pair Corralation between Green Shift and Red Moon
Assuming the 90 days horizon Green Shift Commodities is expected to generate 3.03 times more return on investment than Red Moon. However, Green Shift is 3.03 times more volatile than Red Moon Resources. It trades about 0.02 of its potential returns per unit of risk. Red Moon Resources is currently generating about -0.13 per unit of risk. If you would invest 2.82 in Green Shift Commodities on December 27, 2024 and sell it today you would lose (0.70) from holding Green Shift Commodities or give up 24.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.83% |
Values | Daily Returns |
Green Shift Commodities vs. Red Moon Resources
Performance |
Timeline |
Green Shift Commodities |
Red Moon Resources |
Green Shift and Red Moon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Green Shift and Red Moon
The main advantage of trading using opposite Green Shift and Red Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Shift position performs unexpectedly, Red Moon 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 Red Moon will offset losses from the drop in Red Moon's long position.Green Shift vs. Marimaca Copper Corp | Green Shift vs. British American Tobacco | Green Shift vs. Philip Morris International | Green Shift vs. Paiute Oil Mining |
Red Moon vs. Aurwest Resources | Red Moon vs. Benton Resources | Red Moon vs. Pan Global Resources | Red Moon vs. Tower Resources |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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