Correlation Between GreenX Metals and Gfinity PLC

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

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

Diversification Opportunities for GreenX Metals and Gfinity PLC

-0.36

Correlation Coefficient

GreenX Metals  Gfinity PLC

Very good diversification

The 3 months correlation between GreenX and Gfinity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity PLC 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 Gfinity PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfinity PLC has no effect on the direction of GreenX Metals i.e., GreenX Metals and Gfinity PLC go up and down completely randomly.

Pair Corralation between GreenX Metals and Gfinity PLC

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Gfinity PLC. But the stock apears to be less risky and, when comparing its historical volatility, GreenX Metals is 3.17 times less risky than Gfinity PLC. The stock trades about 0.0 of its potential returns per unit of risk. The Gfinity PLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Gfinity PLC on October 9, 2024 and sell it today you would lose (39.50) from holding Gfinity PLC or give up 84.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

GreenX Metals  vs.  Gfinity PLC

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Gfinity PLC

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Gfinity PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Gfinity PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenX Metals and Gfinity PLC

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

The idea behind GreenX Metals and Gfinity PLC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.