Correlation Between Noble Financials and GreenX Metals

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

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

Diversification Opportunities for Noble Financials and GreenX Metals

0.5

Correlation Coefficient

Noble Financials  GreenX Metals

Very weak diversification

The 3 months correlation between Noble and GreenX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Noble Financials 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 Noble Financials SA are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Noble Financials i.e., Noble Financials and GreenX Metals go up and down completely randomly.

Pair Corralation between Noble Financials and GreenX Metals

Assuming the 90 days trading horizon Noble Financials SA is expected to generate 1.61 times more return on investment than GreenX Metals. However, Noble Financials is 1.61 times more volatile than GreenX Metals. It trades about 0.02 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.05 per unit of risk. If you would invest  8,000  in Noble Financials SA on October 2, 2024 and sell it today you would lose (420.00) from holding Noble Financials SA or give up 5.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Noble Financials SA  vs.  GreenX Metals

Noble Financials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Financials SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GreenX Metals

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Noble Financials and GreenX Metals

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

The idea behind Noble Financials SA and GreenX Metals 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 Commodity Directory module to find actively traded commodities issued by global exchanges.