Correlation Between GreenX Metals and MT Bank

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

By analyzing existing cross correlation between GreenX Metals and MT Bank Corp, you can compare the effects of market volatilities on GreenX Metals and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and MT Bank.

Diversification Opportunities for GreenX Metals and MT Bank

-0.15

Correlation Coefficient

GreenX Metals  MT Bank

Good diversification

The 3 months correlation between GreenX and 0JW2 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of GreenX Metals i.e., GreenX Metals and MT Bank go up and down completely randomly.

Pair Corralation between GreenX Metals and MT Bank

Assuming the 90 days trading horizon GreenX Metals is expected to generate 1.67 times more return on investment than MT Bank. However, GreenX Metals is 1.67 times more volatile than MT Bank Corp. It trades about -0.02 of its potential returns per unit of risk. MT Bank Corp is currently generating about -0.32 per unit of risk. If you would invest  3,450  in GreenX Metals on September 20, 2024 and sell it today you would lose (50.00) from holding GreenX Metals or give up 1.45% of portfolio value over 90 days.

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

GreenX Metals  vs.  MT Bank Corp

GreenX Metals

Risk-Adjusted Performance

1 of 100

Weak

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

MT Bank Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MT Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GreenX Metals and MT Bank

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

The idea behind GreenX Metals and MT Bank Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.