Correlation Between Bri Chem and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Bri Chem 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 Bri Chem and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bri Chem Corp and Globex Mining Enterprises, you can compare the effects of market volatilities on Bri Chem 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 Bri Chem with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bri Chem and Globex Mining.
Diversification Opportunities for Bri Chem and Globex Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bri and Globex is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bri Chem Corp 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 Bri Chem 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 Bri Chem Corp 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 Bri Chem i.e., Bri Chem and Globex Mining go up and down completely randomly.
Pair Corralation between Bri Chem and Globex Mining
Assuming the 90 days trading horizon Bri Chem Corp is expected to generate 2.98 times more return on investment than Globex Mining. However, Bri Chem is 2.98 times more volatile than Globex Mining Enterprises. It trades about 0.07 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.05 per unit of risk. If you would invest 8.78 in Bri Chem Corp on September 14, 2024 and sell it today you would earn a total of 28.22 from holding Bri Chem Corp or generate 321.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bri Chem Corp vs. Globex Mining Enterprises
Performance |
| Timeline |
| Bri Chem Corp |
| Globex Mining Enterprises |
Bri Chem and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bri Chem and Globex Mining
The main advantage of trading using opposite Bri Chem and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bri Chem 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.| Bri Chem vs. PHX Energy Services | Bri Chem vs. CES Energy Solutions | Bri Chem vs. Total Energy Services | Bri Chem vs. Pason Systems |
| Globex Mining vs. Foraco International SA | Globex Mining vs. Geodrill Limited | Globex Mining vs. Major Drilling Group | Globex Mining vs. Bri Chem 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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