Correlation Between Pets At and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Pets At 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 Pets At and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pets at Home and GreenX Metals, you can compare the effects of market volatilities on Pets At 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 Pets At with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pets At and GreenX Metals.
Diversification Opportunities for Pets At and GreenX Metals
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pets and GreenX is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Pets At 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 Pets at Home 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 Pets At i.e., Pets At and GreenX Metals go up and down completely randomly.
Pair Corralation between Pets At and GreenX Metals
Assuming the 90 days trading horizon Pets at Home is expected to generate 0.39 times more return on investment than GreenX Metals. However, Pets at Home is 2.54 times less risky than GreenX Metals. It trades about 0.11 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.01 per unit of risk. If you would invest 22,418 in Pets at Home on April 22, 2025 and sell it today you would earn a total of 1,922 from holding Pets at Home or generate 8.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pets at Home vs. GreenX Metals
Performance |
Timeline |
Pets at Home |
GreenX Metals |
Pets At and GreenX Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pets At and GreenX Metals
The main advantage of trading using opposite Pets At and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At 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.Pets At vs. Berkshire Hathaway | Pets At vs. Samsung Electronics Co | Pets At vs. Samsung Electronics Co | Pets At vs. Samsung Electronics Co |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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