Correlation Between BROADWIND ENRGY and Globex Mining
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and Globex Mining 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 BROADWIND ENRGY and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Globex Mining Enterprises, you can compare the effects of market volatilities on BROADWIND ENRGY and Globex Mining 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 BROADWIND ENRGY with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Globex Mining.
Diversification Opportunities for BROADWIND ENRGY and Globex Mining
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BROADWIND and Globex is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and Globex Mining go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Globex Mining
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the Globex Mining. In addition to that, BROADWIND ENRGY is 1.72 times more volatile than Globex Mining Enterprises. It trades about -0.29 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.58 per unit of volatility. If you would invest 79.00 in Globex Mining Enterprises on November 6, 2024 and sell it today you would earn a total of 27.00 from holding Globex Mining Enterprises or generate 34.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Globex Mining Enterprises
Performance |
| Timeline |
| BROADWIND ENRGY |
| Globex Mining Enterprises |
BROADWIND ENRGY and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Globex Mining
The main advantage of trading using opposite BROADWIND ENRGY and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| BROADWIND ENRGY vs. WILLIS LEASE FIN | BROADWIND ENRGY vs. MARKET VECTR RETAIL | BROADWIND ENRGY vs. H2O Retailing | BROADWIND ENRGY vs. FIRST SHIP LEASE |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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