Correlation Between Legal General and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both Legal General and Greenroc 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 Legal General and Greenroc Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General Group and Greenroc Mining PLC, you can compare the effects of market volatilities on Legal General and Greenroc 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 Legal General with a short position of Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and Greenroc Mining.
Diversification Opportunities for Legal General and Greenroc Mining
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legal and Greenroc is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Legal General Group and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining PLC and Legal General 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 Legal General Group are associated (or correlated) with Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Legal General i.e., Legal General and Greenroc Mining go up and down completely randomly.
Pair Corralation between Legal General and Greenroc Mining
Assuming the 90 days trading horizon Legal General Group is expected to generate 0.25 times more return on investment than Greenroc Mining. However, Legal General Group is 4.05 times less risky than Greenroc Mining. It trades about 0.11 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.02 per unit of risk. If you would invest 22,350 in Legal General Group on December 1, 2024 and sell it today you would earn a total of 2,120 from holding Legal General Group or generate 9.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Legal General Group vs. Greenroc Mining PLC
Performance |
Timeline |
Legal General Group |
Greenroc Mining PLC |
Legal General and Greenroc Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legal General and Greenroc Mining
The main advantage of trading using opposite Legal General and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, Greenroc 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.Legal General vs. Cairo Communication SpA | Legal General vs. Batm Advanced Communications | Legal General vs. Alaska Air Group | Legal General vs. Delta Air Lines |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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