Correlation Between BizLink Holding and Global PMX
Can any of the company-specific risk be diversified away by investing in both BizLink Holding 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 BizLink Holding and Global PMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Global PMX Co, you can compare the effects of market volatilities on BizLink Holding 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 BizLink Holding with a short position of Global PMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Global PMX.
Diversification Opportunities for BizLink Holding and Global PMX
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BizLink and Global is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Global PMX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global PMX and BizLink Holding 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 BizLink Holding 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 BizLink Holding i.e., BizLink Holding and Global PMX go up and down completely randomly.
Pair Corralation between BizLink Holding and Global PMX
Assuming the 90 days trading horizon BizLink Holding is expected to generate 1.02 times more return on investment than Global PMX. However, BizLink Holding is 1.02 times more volatile than Global PMX Co. It trades about 0.39 of its potential returns per unit of risk. Global PMX Co is currently generating about -0.13 per unit of risk. If you would invest 47,150 in BizLink Holding on September 1, 2024 and sell it today you would earn a total of 17,550 from holding BizLink Holding or generate 37.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BizLink Holding vs. Global PMX Co
Performance |
| Timeline |
| BizLink Holding |
| Global PMX |
BizLink Holding and Global PMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BizLink Holding and Global PMX
The main advantage of trading using opposite BizLink Holding and Global PMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding 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.| BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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