Correlation Between Greenroc Mining and AMG Advanced

Can any of the company-specific risk be diversified away by investing in both Greenroc Mining and AMG Advanced 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 Greenroc Mining and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greenroc Mining PLC and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Greenroc Mining and AMG Advanced 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 Greenroc Mining with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenroc Mining and AMG Advanced.

Diversification Opportunities for Greenroc Mining and AMG Advanced

0.26

Correlation Coefficient

Greenroc Mining  AMG Advanced

Modest diversification

The 3 months correlation between Greenroc and AMG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Greenroc Mining PLC and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Greenroc Mining 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 Greenroc Mining PLC are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Greenroc Mining i.e., Greenroc Mining and AMG Advanced go up and down completely randomly.

Pair Corralation between Greenroc Mining and AMG Advanced

Assuming the 90 days trading horizon Greenroc Mining PLC is expected to generate 1.69 times more return on investment than AMG Advanced. However, Greenroc Mining is 1.69 times more volatile than AMG Advanced Metallurgical. It trades about 0.08 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.01 per unit of risk. If you would invest  135.00  in Greenroc Mining PLC on September 2, 2024 and sell it today you would earn a total of  25.00  from holding Greenroc Mining PLC or generate 18.52% return on investment over 90 days.

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

Greenroc Mining PLC  vs.  AMG Advanced Metallurgical

Greenroc Mining PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greenroc Mining PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Greenroc Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Greenroc Mining and AMG Advanced

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

The idea behind Greenroc Mining PLC and AMG Advanced Metallurgical 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.