Correlation Between Capital Income and GLOBAL COSMED
Can any of the company-specific risk be diversified away by investing in both Capital Income and GLOBAL COSMED 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 Capital Income and GLOBAL COSMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and GLOBAL MED SA, you can compare the effects of market volatilities on Capital Income and GLOBAL COSMED 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 Capital Income with a short position of GLOBAL COSMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and GLOBAL COSMED.
Diversification Opportunities for Capital Income and GLOBAL COSMED
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and GLOBAL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and GLOBAL MED SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL MED SA and Capital Income 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 Capital Income Builder are associated (or correlated) with GLOBAL COSMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL MED SA has no effect on the direction of Capital Income i.e., Capital Income and GLOBAL COSMED go up and down completely randomly.
Pair Corralation between Capital Income and GLOBAL COSMED
Assuming the 90 days horizon Capital Income is expected to generate 7.5 times less return on investment than GLOBAL COSMED. But when comparing it to its historical volatility, Capital Income Builder is 5.43 times less risky than GLOBAL COSMED. It trades about 0.08 of its potential returns per unit of risk. GLOBAL MED SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 59.00 in GLOBAL MED SA on November 3, 2024 and sell it today you would earn a total of 65.00 from holding GLOBAL MED SA or generate 110.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Capital Income Builder vs. GLOBAL MED SA
Performance |
| Timeline |
| Capital Income Builder |
| GLOBAL MED SA |
Capital Income and GLOBAL COSMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and GLOBAL COSMED
The main advantage of trading using opposite Capital Income and GLOBAL COSMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, GLOBAL COSMED 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 GLOBAL COSMED will offset losses from the drop in GLOBAL COSMED's long position.| Capital Income vs. Blackrock Financial Institutions | Capital Income vs. Fidelity Advisor Financial | Capital Income vs. Blackstone Secured Lending | Capital Income vs. 1919 Financial Services |
| GLOBAL COSMED vs. Yanzhou Coal Mining | GLOBAL COSMED vs. GALENA MINING LTD | GLOBAL COSMED vs. MCEWEN MINING INC | GLOBAL COSMED vs. Singapore Airlines 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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