Correlation Between GREENX METALS and DALATA HOTEL

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

By analyzing existing cross correlation between GREENX METALS LTD and DALATA HOTEL, you can compare the effects of market volatilities on GREENX METALS and DALATA HOTEL 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 GREENX METALS with a short position of DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and DALATA HOTEL.

Diversification Opportunities for GREENX METALS and DALATA HOTEL

-0.55

Correlation Coefficient

GREENX METALS  DALATA HOTEL

Excellent diversification

The 3 months correlation between GREENX and DALATA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL and GREENX 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 GREENX METALS LTD are associated (or correlated) with DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of GREENX METALS i.e., GREENX METALS and DALATA HOTEL go up and down completely randomly.

Pair Corralation between GREENX METALS and DALATA HOTEL

Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the DALATA HOTEL. In addition to that, GREENX METALS is 1.45 times more volatile than DALATA HOTEL. It trades about -0.02 of its total potential returns per unit of risk. DALATA HOTEL is currently generating about 0.1 per unit of volatility. If you would invest  367.00  in DALATA HOTEL on September 26, 2024 and sell it today you would earn a total of  74.00  from holding DALATA HOTEL or generate 20.16% return on investment over 90 days.

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

GREENX METALS LTD  vs.  DALATA HOTEL

GREENX METALS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENX METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, GREENX METALS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

DALATA HOTEL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, DALATA HOTEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GREENX METALS and DALATA HOTEL

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

The idea behind GREENX METALS LTD and DALATA HOTEL 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.