Correlation Between ONWARD MEDICAL and Globe Trade
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL and Globe Trade 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 ONWARD MEDICAL and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and Globe Trade Centre, you can compare the effects of market volatilities on ONWARD MEDICAL and Globe Trade 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 ONWARD MEDICAL with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and Globe Trade.
Diversification Opportunities for ONWARD MEDICAL and Globe Trade
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ONWARD and Globe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre and ONWARD MEDICAL 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 ONWARD MEDICAL BV are associated (or correlated) with Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of ONWARD MEDICAL i.e., ONWARD MEDICAL and Globe Trade go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and Globe Trade
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 3.14 times more return on investment than Globe Trade. However, ONWARD MEDICAL is 3.14 times more volatile than Globe Trade Centre. It trades about 0.01 of its potential returns per unit of risk. Globe Trade Centre is currently generating about 0.03 per unit of risk. If you would invest 585.00 in ONWARD MEDICAL BV on September 3, 2024 and sell it today you would lose (143.00) from holding ONWARD MEDICAL BV or give up 24.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. Globe Trade Centre
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| Globe Trade Centre |
ONWARD MEDICAL and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and Globe Trade
The main advantage of trading using opposite ONWARD MEDICAL and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| ONWARD MEDICAL vs. ADRIATIC METALS LS 013355 | ONWARD MEDICAL vs. TFS FINANCIAL | ONWARD MEDICAL vs. Aozora Bank | ONWARD MEDICAL vs. COMINTL BANK ADR1 |
| Globe Trade vs. National Health Investors | Globe Trade vs. ONWARD MEDICAL BV | Globe Trade vs. FEMALE HEALTH | Globe Trade vs. Compugroup Medical SE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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