Correlation Between Mo Bruk and GreenX Metals

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

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

Diversification Opportunities for Mo Bruk and GreenX Metals

0.15

Correlation Coefficient

Mo Bruk  GreenX Metals

Average diversification

The 3 months correlation between MBR and GreenX is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mo Bruk SA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Mo Bruk 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 Mo Bruk 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 Mo Bruk i.e., Mo Bruk and GreenX Metals go up and down completely randomly.

Pair Corralation between Mo Bruk and GreenX Metals

Assuming the 90 days trading horizon Mo Bruk is expected to generate 10.95 times less return on investment than GreenX Metals. But when comparing it to its historical volatility, Mo Bruk SA is 1.98 times less risky than GreenX Metals. It trades about 0.03 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  170.00  in GreenX Metals on December 20, 2024 and sell it today you would earn a total of  39.00  from holding GreenX Metals or generate 22.94% return on investment over 90 days.

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

Mo Bruk SA  vs.  GreenX Metals

Mo Bruk SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mo Bruk SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Mo Bruk is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

GreenX Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenX Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mo Bruk and GreenX Metals

The main advantage of trading using opposite Mo Bruk and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mo Bruk 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 Mo Bruk 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.