Correlation Between GreenX Metals and Givaudan

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

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

Diversification Opportunities for GreenX Metals and Givaudan

-0.1

Correlation Coefficient

GreenX Metals  Givaudan

Good diversification

The 3 months correlation between GreenX and Givaudan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of GreenX Metals i.e., GreenX Metals and Givaudan go up and down completely randomly.

Pair Corralation between GreenX Metals and Givaudan

Assuming the 90 days trading horizon GreenX Metals is expected to generate 1.42 times more return on investment than Givaudan. However, GreenX Metals is 1.42 times more volatile than Givaudan SA. It trades about 0.07 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.05 per unit of risk. If you would invest  3,550  in GreenX Metals on December 1, 2024 and sell it today you would earn a total of  250.00  from holding GreenX Metals or generate 7.04% return on investment over 90 days.

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

GreenX Metals  vs.  Givaudan SA

GreenX Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 5 (%) 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 April 2025.

Givaudan SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Givaudan SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Givaudan 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 Givaudan

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

The idea behind GreenX Metals and Givaudan SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.