Correlation Between Metals Exploration and Genuit Group

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

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

Diversification Opportunities for Metals Exploration and Genuit Group

0.04

Correlation Coefficient

Metals Exploration  Genuit Group

Significant diversification

The 3 months correlation between Metals and Genuit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Genuit Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuit Group plc and Metals Exploration 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 Metals Exploration Plc are associated (or correlated) with Genuit Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuit Group plc has no effect on the direction of Metals Exploration i.e., Metals Exploration and Genuit Group go up and down completely randomly.

Pair Corralation between Metals Exploration and Genuit Group

Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.74 times more return on investment than Genuit Group. However, Metals Exploration is 1.74 times more volatile than Genuit Group plc. It trades about -0.07 of its potential returns per unit of risk. Genuit Group plc is currently generating about -0.15 per unit of risk. If you would invest  544.00  in Metals Exploration Plc on September 13, 2024 and sell it today you would lose (29.00) from holding Metals Exploration Plc or give up 5.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Metals Exploration Plc  vs.  Genuit Group plc

Metals Exploration Plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Metals Exploration Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Metals Exploration is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Genuit Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genuit Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Metals Exploration and Genuit Group

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

The idea behind Metals Exploration Plc and Genuit Group plc 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.