Correlation Between Coty and Global Partner
Can any of the company-specific risk be diversified away by investing in both Coty and Global Partner 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 Coty and Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and Global Partner Acq, you can compare the effects of market volatilities on Coty and Global Partner 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 Coty with a short position of Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and Global Partner.
Diversification Opportunities for Coty and Global Partner
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coty and Global is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq and Coty 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 Coty Inc are associated (or correlated) with Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Coty i.e., Coty and Global Partner go up and down completely randomly.
Pair Corralation between Coty and Global Partner
Given the investment horizon of 90 days Coty Inc is expected to under-perform the Global Partner. In addition to that, Coty is 2.16 times more volatile than Global Partner Acq. It trades about -0.05 of its total potential returns per unit of risk. Global Partner Acq is currently generating about -0.02 per unit of volatility. If you would invest 1,073 in Global Partner Acq on September 12, 2024 and sell it today you would lose (70.00) from holding Global Partner Acq or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 69.32% |
| Values | Daily Returns |
Coty Inc vs. Global Partner Acq
Performance |
| Timeline |
| Coty Inc |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coty and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and Global Partner
The main advantage of trading using opposite Coty and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, Global Partner 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 Partner will offset losses from the drop in Global Partner's long position.| Coty vs. Victory Integrity Smallmid Cap | Coty vs. Hilton Worldwide Holdings | Coty vs. NVIDIA | Coty vs. JPMorgan Chase Co |
| Global Partner vs. Griffon | Global Partner vs. Coty Inc | Global Partner vs. Aldel Financial II | Global Partner vs. Timken Company |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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