Correlation Between Green Technology and Adventus Mining

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

By analyzing existing cross correlation between Green Technology Metals and Adventus Mining, you can compare the effects of market volatilities on Green Technology and Adventus 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 Green Technology with a short position of Adventus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Technology and Adventus Mining.

Diversification Opportunities for Green Technology and Adventus Mining

0.32

Correlation Coefficient

Green Technology  Adventus Mining

Weak diversification

The 3 months correlation between Green and Adventus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Green Technology Metals and Adventus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventus Mining and Green Technology 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 Green Technology Metals are associated (or correlated) with Adventus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventus Mining has no effect on the direction of Green Technology i.e., Green Technology and Adventus Mining go up and down completely randomly.

Pair Corralation between Green Technology and Adventus Mining

Assuming the 90 days horizon Green Technology is expected to generate 1.0 times less return on investment than Adventus Mining. In addition to that, Green Technology is 3.5 times more volatile than Adventus Mining. It trades about 0.04 of its total potential returns per unit of risk. Adventus Mining is currently generating about 0.13 per unit of volatility. If you would invest  17.00  in Adventus Mining on October 22, 2024 and sell it today you would earn a total of  15.00  from holding Adventus Mining or generate 88.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	49.78%
Values	Daily Returns

Green Technology Metals  vs.  Adventus Mining

Green Technology Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Technology Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Adventus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventus Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adventus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Green Technology and Adventus Mining

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

The idea behind Green Technology Metals and Adventus Mining 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.