Correlation Between Cembra Money and Global Net
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Global Net 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 Cembra Money and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Global Net Lease, you can compare the effects of market volatilities on Cembra Money and Global Net 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 Cembra Money with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Global Net.
Diversification Opportunities for Cembra Money and Global Net
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cembra and Global is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Cembra Money 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 Cembra Money Bank are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Cembra Money i.e., Cembra Money and Global Net go up and down completely randomly.
Pair Corralation between Cembra Money and Global Net
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.52 times more return on investment than Global Net. However, Cembra Money Bank is 1.94 times less risky than Global Net. It trades about 0.26 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.05 per unit of risk. If you would invest 8,110 in Cembra Money Bank on October 30, 2024 and sell it today you would earn a total of 818.00 from holding Cembra Money Bank or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Cembra Money Bank vs. Global Net Lease
Performance |
| Timeline |
| Cembra Money Bank |
| Global Net Lease |
Cembra Money and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Global Net
The main advantage of trading using opposite Cembra Money and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Cembra Money vs. Wizz Air Holdings | Cembra Money vs. DXC Technology Co | Cembra Money vs. Ashtead Technology Holdings | Cembra Money vs. Allianz Technology Trust |
| Global Net vs. Induction Healthcare Group | Global Net vs. Eco Animal Health | Global Net vs. Universal Display Corp | Global Net vs. Melia Hotels |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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