Correlation Between GreenX Metals and Broadridge Financial

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

By analyzing existing cross correlation between GreenX Metals and Broadridge Financial Solutions, you can compare the effects of market volatilities on GreenX Metals and Broadridge Financial 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 GreenX Metals with a short position of Broadridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Broadridge Financial.

Diversification Opportunities for GreenX Metals and Broadridge Financial

-0.78

Correlation Coefficient

GreenX Metals  Broadridge Financial

Pay attention - limited upside

The 3 months correlation between GreenX and Broadridge is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Broadridge Financial Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadridge Financial and GreenX 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 GreenX Metals are associated (or correlated) with Broadridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadridge Financial has no effect on the direction of GreenX Metals i.e., GreenX Metals and Broadridge Financial go up and down completely randomly.

Pair Corralation between GreenX Metals and Broadridge Financial

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Broadridge Financial. In addition to that, GreenX Metals is 2.04 times more volatile than Broadridge Financial Solutions. It trades about -0.07 of its total potential returns per unit of risk. Broadridge Financial Solutions is currently generating about 0.1 per unit of volatility. If you would invest  21,719  in Broadridge Financial Solutions on October 22, 2024 and sell it today you would earn a total of  1,458  from holding Broadridge Financial Solutions or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

GreenX Metals  vs.  Broadridge Financial Solutions

GreenX Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenX Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Broadridge Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GreenX Metals and Broadridge Financial

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

The idea behind GreenX Metals and Broadridge Financial Solutions 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.