Correlation Between GreenX Metals and Amundi Physical

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

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

Diversification Opportunities for GreenX Metals and Amundi Physical

0.36

Correlation Coefficient

GreenX Metals  Amundi Physical

Weak diversification

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

Pair Corralation between GreenX Metals and Amundi Physical

Assuming the 90 days trading horizon GreenX Metals is expected to generate 1.08 times less return on investment than Amundi Physical. In addition to that, GreenX Metals is 1.48 times more volatile than Amundi Physical Gold. It trades about 0.03 of its total potential returns per unit of risk. Amundi Physical Gold is currently generating about 0.04 per unit of volatility. If you would invest  578,463  in Amundi Physical Gold on September 2, 2024 and sell it today you would earn a total of  253,062  from holding Amundi Physical Gold or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

GreenX Metals  vs.  Amundi Physical Gold

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amundi Physical Gold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Physical Gold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amundi Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GreenX Metals and Amundi Physical

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

The idea behind GreenX Metals and Amundi Physical Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.