Correlation Between Globaltek Fabrication and TBI Motion
Can any of the company-specific risk be diversified away by investing in both Globaltek Fabrication and TBI Motion 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 Globaltek Fabrication and TBI Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globaltek Fabrication Co and TBI Motion Technology, you can compare the effects of market volatilities on Globaltek Fabrication and TBI Motion 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 Globaltek Fabrication with a short position of TBI Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globaltek Fabrication and TBI Motion.
Diversification Opportunities for Globaltek Fabrication and TBI Motion
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globaltek and TBI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Globaltek Fabrication Co and TBI Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBI Motion Technology and Globaltek Fabrication 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 Globaltek Fabrication Co are associated (or correlated) with TBI Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBI Motion Technology has no effect on the direction of Globaltek Fabrication i.e., Globaltek Fabrication and TBI Motion go up and down completely randomly.
Pair Corralation between Globaltek Fabrication and TBI Motion
Assuming the 90 days trading horizon Globaltek Fabrication Co is expected to generate 1.29 times more return on investment than TBI Motion. However, Globaltek Fabrication is 1.29 times more volatile than TBI Motion Technology. It trades about 0.04 of its potential returns per unit of risk. TBI Motion Technology is currently generating about 0.02 per unit of risk. If you would invest 5,350 in Globaltek Fabrication Co on September 2, 2024 and sell it today you would earn a total of 2,390 from holding Globaltek Fabrication Co or generate 44.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globaltek Fabrication Co vs. TBI Motion Technology
Performance |
| Timeline |
| Globaltek Fabrication |
| TBI Motion Technology |
Globaltek Fabrication and TBI Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globaltek Fabrication and TBI Motion
The main advantage of trading using opposite Globaltek Fabrication and TBI Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globaltek Fabrication position performs unexpectedly, TBI Motion 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 TBI Motion will offset losses from the drop in TBI Motion's long position.| Globaltek Fabrication vs. Sunonwealth Electric Machine | Globaltek Fabrication vs. Rechi Precision Co | Globaltek Fabrication vs. Fittech Co | Globaltek Fabrication vs. C Sun Manufacturing |
| TBI Motion vs. Hiwin Technologies Corp | TBI Motion vs. QST International | TBI Motion vs. Intai Technology | TBI Motion vs. Basso Industry Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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