Correlation Between Global Brands and Flexium Interconnect
Can any of the company-specific risk be diversified away by investing in both Global Brands and Flexium Interconnect 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 Global Brands and Flexium Interconnect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Brands Manufacture and Flexium Interconnect, you can compare the effects of market volatilities on Global Brands and Flexium Interconnect 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 Global Brands with a short position of Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Brands and Flexium Interconnect.
Diversification Opportunities for Global Brands and Flexium Interconnect
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Flexium is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Brands Manufacture and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect and Global Brands 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 Global Brands Manufacture are associated (or correlated) with Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of Global Brands i.e., Global Brands and Flexium Interconnect go up and down completely randomly.
Pair Corralation between Global Brands and Flexium Interconnect
Assuming the 90 days trading horizon Global Brands Manufacture is expected to generate 1.39 times more return on investment than Flexium Interconnect. However, Global Brands is 1.39 times more volatile than Flexium Interconnect. It trades about 0.03 of its potential returns per unit of risk. Flexium Interconnect is currently generating about -0.03 per unit of risk. If you would invest 6,400 in Global Brands Manufacture on November 28, 2024 and sell it today you would earn a total of 1,110 from holding Global Brands Manufacture or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Brands Manufacture vs. Flexium Interconnect
Performance |
| Timeline |
| Global Brands Manufacture |
| Flexium Interconnect |
Global Brands and Flexium Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Brands and Flexium Interconnect
The main advantage of trading using opposite Global Brands and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Brands position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect's long position.| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
| Flexium Interconnect vs. Zhen Ding Technology | Flexium Interconnect vs. Catcher Technology Co | Flexium Interconnect vs. Unimicron Technology Corp | Flexium Interconnect vs. Career Technology MFG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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