Correlation Between GreenX Metals and Marks

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

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

Diversification Opportunities for GreenX Metals and Marks

0.04

Correlation Coefficient

GreenX Metals  Marks

Significant diversification

The 3 months correlation between GreenX and Marks is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of GreenX Metals i.e., GreenX Metals and Marks go up and down completely randomly.

Pair Corralation between GreenX Metals and Marks

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Marks. In addition to that, GreenX Metals is 2.02 times more volatile than Marks and Spencer. It trades about -0.13 of its total potential returns per unit of risk. Marks and Spencer is currently generating about 0.06 per unit of volatility. If you would invest  37,093  in Marks and Spencer on October 8, 2024 and sell it today you would earn a total of  1,957  from holding Marks and Spencer or generate 5.28% 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.  Marks and Spencer

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.

Marks and Spencer

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marks and Spencer are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Marks is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GreenX Metals and Marks

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

The idea behind GreenX Metals and Marks and Spencer 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.