Correlation Between Logintrade and GreenX Metals

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

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

Diversification Opportunities for Logintrade and GreenX Metals

-0.58

Correlation Coefficient

Logintrade  GreenX Metals

Excellent diversification

The 3 months correlation between Logintrade and GreenX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Logintrade SA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Logintrade 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 Logintrade 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 Logintrade i.e., Logintrade and GreenX Metals go up and down completely randomly.

Pair Corralation between Logintrade and GreenX Metals

Assuming the 90 days trading horizon Logintrade is expected to generate 2.66 times less return on investment than GreenX Metals. In addition to that, Logintrade is 2.6 times more volatile than GreenX Metals. It trades about 0.05 of its total potential returns per unit of risk. GreenX Metals is currently generating about 0.38 per unit of volatility. If you would invest  168.00  in GreenX Metals on October 24, 2024 and sell it today you would earn a total of  27.00  from holding GreenX Metals or generate 16.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	62.5%
Values	Daily Returns

Logintrade SA  vs.  GreenX Metals

Logintrade SA

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Logintrade SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Logintrade reported solid returns over the last few months and may actually be approaching a breakup point.

GreenX Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenX Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GreenX Metals is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Logintrade and GreenX Metals

The main advantage of trading using opposite Logintrade and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logintrade 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 Logintrade 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.