Correlation Between COMINTL BANK and Globe Trade
Can any of the company-specific risk be diversified away by investing in both COMINTL BANK 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 COMINTL BANK and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMINTL BANK ADR1 and Globe Trade Centre, you can compare the effects of market volatilities on COMINTL BANK 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 COMINTL BANK with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and Globe Trade.
Diversification Opportunities for COMINTL BANK and Globe Trade
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COMINTL and Globe is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 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 COMINTL BANK 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 COMINTL BANK ADR1 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 COMINTL BANK i.e., COMINTL BANK and Globe Trade go up and down completely randomly.
Pair Corralation between COMINTL BANK and Globe Trade
Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 1.79 times more return on investment than Globe Trade. However, COMINTL BANK is 1.79 times more volatile than Globe Trade Centre. It trades about 0.05 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.09 per unit of risk. If you would invest 124.00 in COMINTL BANK ADR1 on November 28, 2024 and sell it today you would earn a total of 2.00 from holding COMINTL BANK ADR1 or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMINTL BANK ADR1 vs. Globe Trade Centre
Performance |
| Timeline |
| COMINTL BANK ADR1 |
| Globe Trade Centre |
COMINTL BANK and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMINTL BANK and Globe Trade
The main advantage of trading using opposite COMINTL BANK and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK 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.| COMINTL BANK vs. alstria office REIT AG | COMINTL BANK vs. Infrastrutture Wireless Italiane | COMINTL BANK vs. 24SEVENOFFICE GROUP AB | COMINTL BANK vs. WILLIS LEASE FIN |
| Globe Trade vs. Sims Metal Management | Globe Trade vs. Jupiter Fund Management | Globe Trade vs. Prosiebensat 1 Media | Globe Trade vs. SALESFORCE INC CDR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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