Correlation Between GreenX Metals and New Tech

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

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

Diversification Opportunities for GreenX Metals and New Tech

0.05

Correlation Coefficient

GreenX Metals  New Tech

Significant diversification

The 3 months correlation between GreenX and New is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and New Tech Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Capital 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 New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Capital has no effect on the direction of GreenX Metals i.e., GreenX Metals and New Tech go up and down completely randomly.

Pair Corralation between GreenX Metals and New Tech

Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.6 times more return on investment than New Tech. However, GreenX Metals is 1.66 times less risky than New Tech. It trades about 0.14 of its potential returns per unit of risk. New Tech Capital is currently generating about 0.04 per unit of risk. If you would invest  170.00  in GreenX Metals on December 20, 2024 and sell it today you would earn a total of  39.00  from holding GreenX Metals or generate 22.94% 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.  New Tech Capital

GreenX Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenX Metals reported solid returns over the last few months and may actually be approaching a breakup point.

New Tech Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in New Tech Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, New Tech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GreenX Metals and New Tech

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

The idea behind GreenX Metals and New Tech Capital 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.