Correlation Between Frontera and Global Payments
Can any of the company-specific risk be diversified away by investing in both Frontera and Global Payments 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 Frontera and Global Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontera Group and Global Payments, you can compare the effects of market volatilities on Frontera and Global Payments 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 Frontera with a short position of Global Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera and Global Payments.
Diversification Opportunities for Frontera and Global Payments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Frontera and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Group and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments and Frontera 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 Frontera Group are associated (or correlated) with Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of Frontera i.e., Frontera and Global Payments go up and down completely randomly.
Pair Corralation between Frontera and Global Payments
If you would invest 0.01 in Frontera Group on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Frontera Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontera Group vs. Global Payments
Performance |
| Timeline |
| Frontera Group |
| Global Payments |
Frontera and Global Payments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera and Global Payments
The main advantage of trading using opposite Frontera and Global Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera position performs unexpectedly, Global Payments 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 Payments will offset losses from the drop in Global Payments' long position.| Frontera vs. XCPCNL Business Services | Frontera vs. International Consolidated Companies | Frontera vs. Global Payments | Frontera vs. Mills Music Trust |
| Global Payments vs. Copart Inc | Global Payments vs. ABM Industries Incorporated | Global Payments vs. Thomson Reuters Corp | Global Payments vs. Aramark Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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