Correlation Between GLOBAL COSMED and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both GLOBAL COSMED and Strategic Investments 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 COSMED and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBAL MED SA and Strategic Investments AS, you can compare the effects of market volatilities on GLOBAL COSMED and Strategic Investments 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 COSMED with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBAL COSMED and Strategic Investments.
Diversification Opportunities for GLOBAL COSMED and Strategic Investments
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between GLOBAL and Strategic is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding GLOBAL MED SA and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and GLOBAL COSMED 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 MED SA are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of GLOBAL COSMED i.e., GLOBAL COSMED and Strategic Investments go up and down completely randomly.
Pair Corralation between GLOBAL COSMED and Strategic Investments
Assuming the 90 days horizon GLOBAL MED SA is expected to generate 0.85 times more return on investment than Strategic Investments. However, GLOBAL MED SA is 1.18 times less risky than Strategic Investments. It trades about 0.14 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.02 per unit of risk. If you would invest 103.00 in GLOBAL MED SA on September 2, 2024 and sell it today you would earn a total of 8.00 from holding GLOBAL MED SA or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLOBAL MED SA vs. Strategic Investments AS
Performance |
| Timeline |
| GLOBAL MED SA |
| Strategic Investments |
GLOBAL COSMED and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBAL COSMED and Strategic Investments
The main advantage of trading using opposite GLOBAL COSMED and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBAL COSMED position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| GLOBAL COSMED vs. Entravision Communications | GLOBAL COSMED vs. Consolidated Communications Holdings | GLOBAL COSMED vs. Hanison Construction Holdings | GLOBAL COSMED vs. Cogent Communications Holdings |
| Strategic Investments vs. Lifeway Foods | Strategic Investments vs. HOCHSCHILD MINING | Strategic Investments vs. THAI BEVERAGE | Strategic Investments vs. Collins Foods Limited |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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