Correlation Between GreenX Metals and Addtech

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

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

Diversification Opportunities for GreenX Metals and Addtech

0.16

Correlation Coefficient

GreenX Metals  Addtech

Average diversification

The 3 months correlation between GreenX and Addtech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of GreenX Metals i.e., GreenX Metals and Addtech go up and down completely randomly.

Pair Corralation between GreenX Metals and Addtech

Assuming the 90 days trading horizon GreenX Metals is expected to generate 1.29 times more return on investment than Addtech. However, GreenX Metals is 1.29 times more volatile than Addtech. It trades about 0.2 of its potential returns per unit of risk. Addtech is currently generating about 0.03 per unit of risk. If you would invest  3,400  in GreenX Metals on December 24, 2024 and sell it today you would earn a total of  950.00  from holding GreenX Metals or generate 27.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GreenX Metals  vs.  Addtech

GreenX Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GreenX Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Addtech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Addtech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Addtech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GreenX Metals and Addtech

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

The idea behind GreenX Metals and Addtech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.