Correlation Between Greentech Metals and VanEck 1

Can any of the company-specific risk be diversified away by investing in both Greentech Metals and VanEck 1 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 Greentech Metals and VanEck 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greentech Metals and VanEck 1 5 Year, you can compare the effects of market volatilities on Greentech Metals and VanEck 1 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 Greentech Metals with a short position of VanEck 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentech Metals and VanEck 1.

Diversification Opportunities for Greentech Metals and VanEck 1

-0.28

Correlation Coefficient

Greentech Metals  VanEck 1

Very good diversification

The 3 months correlation between Greentech and VanEck is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and VanEck 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck 1 5 and Greentech Metals 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 Greentech Metals are associated (or correlated) with VanEck 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck 1 5 has no effect on the direction of Greentech Metals i.e., Greentech Metals and VanEck 1 go up and down completely randomly.

Pair Corralation between Greentech Metals and VanEck 1

Assuming the 90 days trading horizon Greentech Metals is expected to generate 38.08 times more return on investment than VanEck 1. However, Greentech Metals is 38.08 times more volatile than VanEck 1 5 Year. It trades about 0.02 of its potential returns per unit of risk. VanEck 1 5 Year is currently generating about 0.0 per unit of risk. If you would invest  8.90  in Greentech Metals on September 2, 2024 and sell it today you would lose (0.40) from holding Greentech Metals or give up 4.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Greentech Metals  vs.  VanEck 1 5 Year

Greentech Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greentech Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Greentech Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VanEck 1 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck 1 5 Year has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck 1 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 Greentech Metals and VanEck 1

The main advantage of trading using opposite Greentech Metals and VanEck 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentech Metals position performs unexpectedly, VanEck 1 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 VanEck 1 will offset losses from the drop in VanEck 1's long position.

The idea behind Greentech Metals and VanEck 1 5 Year 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 Transaction History module to view history of all your transactions and understand their impact on performance.