Correlation Between Greentech Metals and FOS Capital

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

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

Diversification Opportunities for Greentech Metals and FOS Capital

-0.3

Correlation Coefficient

Greentech Metals  FOS Capital

Very good diversification

The 3 months correlation between Greentech and FOS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and FOS Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOS Capital and Greentech Metals 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 Greentech Metals are associated (or correlated) with FOS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOS Capital has no effect on the direction of Greentech Metals i.e., Greentech Metals and FOS Capital go up and down completely randomly.

Pair Corralation between Greentech Metals and FOS Capital

Assuming the 90 days trading horizon Greentech Metals is expected to generate 2.96 times more return on investment than FOS Capital. However, Greentech Metals is 2.96 times more volatile than FOS Capital. It trades about 0.14 of its potential returns per unit of risk. FOS Capital is currently generating about 0.13 per unit of risk. If you would invest  4.20  in Greentech Metals on April 5, 2025 and sell it today you would earn a total of  0.80  from holding Greentech Metals or generate 19.05% return on investment over 90 days.

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

Greentech Metals  vs.  FOS Capital

Greentech Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greentech Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Greentech Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

FOS Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FOS Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FOS Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greentech Metals and FOS Capital

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

The idea behind Greentech Metals and FOS Capital 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.