Correlation Between GreenX Metals and Eastinco Mining

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

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

Diversification Opportunities for GreenX Metals and Eastinco Mining

0.18

Correlation Coefficient

GreenX Metals  Eastinco Mining

Average diversification

The 3 months correlation between GreenX and Eastinco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl 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 Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of GreenX Metals i.e., GreenX Metals and Eastinco Mining go up and down completely randomly.

Pair Corralation between GreenX Metals and Eastinco Mining

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Eastinco Mining. In addition to that, GreenX Metals is 1.54 times more volatile than Eastinco Mining Exploration. It trades about -0.2 of its total potential returns per unit of risk. Eastinco Mining Exploration is currently generating about -0.06 per unit of volatility. If you would invest  4,900  in Eastinco Mining Exploration on October 6, 2024 and sell it today you would lose (200.00) from holding Eastinco Mining Exploration or give up 4.08% of portfolio value over 90 days.

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

GreenX Metals  vs.  Eastinco Mining Exploration

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 sound technical and fundamental indicators, GreenX Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with GreenX Metals and Eastinco Mining

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

The idea behind GreenX Metals and Eastinco Mining Exploration 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.