Correlation Between Global Helium and Metals X

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

By analyzing existing cross correlation between Global Helium Corp and Metals X Limited, you can compare the effects of market volatilities on Global Helium and Metals X 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 Global Helium with a short position of Metals X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Helium and Metals X.

Diversification Opportunities for Global Helium and Metals X

-0.71

Correlation Coefficient

Global Helium  Metals X

Pay attention - limited upside

The 3 months correlation between Global and Metals is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Global Helium Corp and Metals X Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals X Limited and Global Helium 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 Global Helium Corp are associated (or correlated) with Metals X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals X Limited has no effect on the direction of Global Helium i.e., Global Helium and Metals X go up and down completely randomly.

Pair Corralation between Global Helium and Metals X

Assuming the 90 days horizon Global Helium Corp is expected to generate 1.79 times more return on investment than Metals X. However, Global Helium is 1.79 times more volatile than Metals X Limited. It trades about -0.03 of its potential returns per unit of risk. Metals X Limited is currently generating about -0.08 per unit of risk. If you would invest  8.40  in Global Helium Corp on February 21, 2024 and sell it today you would lose (0.85) from holding Global Helium Corp or give up 10.12% of portfolio value over 90 days.

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

Global Helium Corp  vs.  Metals X Limited

Global Helium Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Metals X Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metals X Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Metals X reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Helium and Metals X

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

The idea behind Global Helium Corp and Metals X Limited 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.