Correlation Between GREENX METALS and Zimmer Biomet

Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Zimmer Biomet 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 Zimmer Biomet 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 Zimmer Biomet Holdings, you can compare the effects of market volatilities on GREENX METALS and Zimmer Biomet 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 Zimmer Biomet. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Zimmer Biomet.

Diversification Opportunities for GREENX METALS and Zimmer Biomet

-0.54

Correlation Coefficient

GREENX METALS  Zimmer Biomet

Excellent diversification

The 3 months correlation between GREENX and Zimmer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Zimmer Biomet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmer Biomet Holdings 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 Zimmer Biomet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmer Biomet Holdings has no effect on the direction of GREENX METALS i.e., GREENX METALS and Zimmer Biomet go up and down completely randomly.

Pair Corralation between GREENX METALS and Zimmer Biomet

Assuming the 90 days trading horizon GREENX METALS is expected to generate 1.55 times less return on investment than Zimmer Biomet. In addition to that, GREENX METALS is 3.48 times more volatile than Zimmer Biomet Holdings. It trades about 0.02 of its total potential returns per unit of risk. Zimmer Biomet Holdings is currently generating about 0.08 per unit of volatility. If you would invest  9,560  in Zimmer Biomet Holdings on September 25, 2024 and sell it today you would earn a total of  690.00  from holding Zimmer Biomet Holdings or generate 7.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

GREENX METALS LTD  vs.  Zimmer Biomet Holdings

GREENX METALS LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GREENX METALS LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Zimmer Biomet Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zimmer Biomet Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zimmer Biomet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GREENX METALS and Zimmer Biomet

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

The idea behind GREENX METALS LTD and Zimmer Biomet Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.