Correlation Between Globant SA and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both Globant SA and TRAINLINE PLC 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 Globant SA and TRAINLINE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globant SA and TRAINLINE PLC LS, you can compare the effects of market volatilities on Globant SA and TRAINLINE PLC 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 Globant SA with a short position of TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globant SA and TRAINLINE PLC.
Diversification Opportunities for Globant SA and TRAINLINE PLC
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globant and TRAINLINE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Globant SA and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS and Globant SA 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 Globant SA are associated (or correlated) with TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Globant SA i.e., Globant SA and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between Globant SA and TRAINLINE PLC
Assuming the 90 days horizon Globant SA is expected to generate 12.38 times less return on investment than TRAINLINE PLC. In addition to that, Globant SA is 1.7 times more volatile than TRAINLINE PLC LS. It trades about 0.01 of its total potential returns per unit of risk. TRAINLINE PLC LS is currently generating about 0.27 per unit of volatility. If you would invest 468.00 in TRAINLINE PLC LS on September 12, 2024 and sell it today you would earn a total of 47.00 from holding TRAINLINE PLC LS or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Globant SA vs. TRAINLINE PLC LS
Performance |
| Timeline |
| Globant SA |
| TRAINLINE PLC LS |
Globant SA and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globant SA and TRAINLINE PLC
The main advantage of trading using opposite Globant SA and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globant SA position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| Globant SA vs. TRAINLINE PLC LS | Globant SA vs. GALENA MINING LTD | Globant SA vs. Transport International Holdings | Globant SA vs. Perseus Mining Limited |
| TRAINLINE PLC vs. TRAVEL LEISURE DL 01 | TRAINLINE PLC vs. TripAdvisor | TRAINLINE PLC vs. Superior Plus Corp | TRAINLINE PLC vs. SIVERS SEMICONDUCTORS AB |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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