Correlation Between Cub Elecparts and Global PMX
Can any of the company-specific risk be diversified away by investing in both Cub Elecparts and Global PMX 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 Cub Elecparts and Global PMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cub Elecparts and Global PMX Co, you can compare the effects of market volatilities on Cub Elecparts and Global PMX 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 Cub Elecparts with a short position of Global PMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cub Elecparts and Global PMX.
Diversification Opportunities for Cub Elecparts and Global PMX
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cub and Global is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cub Elecparts and Global PMX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global PMX and Cub Elecparts 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 Cub Elecparts are associated (or correlated) with Global PMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global PMX has no effect on the direction of Cub Elecparts i.e., Cub Elecparts and Global PMX go up and down completely randomly.
Pair Corralation between Cub Elecparts and Global PMX
Assuming the 90 days trading horizon Cub Elecparts is expected to under-perform the Global PMX. But the stock apears to be less risky and, when comparing its historical volatility, Cub Elecparts is 1.45 times less risky than Global PMX. The stock trades about -0.05 of its potential returns per unit of risk. The Global PMX Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,250 in Global PMX Co on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Global PMX Co or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cub Elecparts vs. Global PMX Co
Performance |
| Timeline |
| Cub Elecparts |
| Global PMX |
Cub Elecparts and Global PMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cub Elecparts and Global PMX
The main advantage of trading using opposite Cub Elecparts and Global PMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cub Elecparts position performs unexpectedly, Global PMX 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 PMX will offset losses from the drop in Global PMX's long position.| Cub Elecparts vs. Hota Industrial Mfg | Cub Elecparts vs. Eclat Textile Co | Cub Elecparts vs. Makalot Industrial Co | Cub Elecparts vs. King Slide Works |
| Global PMX vs. Hota Industrial Mfg | Global PMX vs. BizLink Holding | Global PMX vs. Cub Elecparts | Global PMX vs. Hu Lane Associate |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |