Correlation Between Greenvale Mining and Abercrombie Fitch

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

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

Diversification Opportunities for Greenvale Mining and Abercrombie Fitch

0.0

Correlation Coefficient

Greenvale Mining  Abercrombie Fitch

Pay attention - limited upside

The 3 months correlation between Greenvale and Abercrombie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Greenvale Mining Limited and Abercrombie Fitch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abercrombie Fitch and Greenvale Mining 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 Greenvale Mining Limited are associated (or correlated) with Abercrombie Fitch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abercrombie Fitch has no effect on the direction of Greenvale Mining i.e., Greenvale Mining and Abercrombie Fitch go up and down completely randomly.

Pair Corralation between Greenvale Mining and Abercrombie Fitch

If you would invest  13,721  in Abercrombie Fitch on October 12, 2024 and sell it today you would earn a total of  1,441  from holding Abercrombie Fitch or generate 10.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Greenvale Mining Limited  vs.  Abercrombie Fitch

Greenvale Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Abercrombie Fitch

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Greenvale Mining and Abercrombie Fitch

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

The idea behind Greenvale Mining Limited and Abercrombie Fitch 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.