Correlation Between Flagship Investments and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Globe Metals 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 Flagship Investments and Globe Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Globe Metals Mining, you can compare the effects of market volatilities on Flagship Investments and Globe Metals 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 Flagship Investments with a short position of Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Globe Metals.
Diversification Opportunities for Flagship Investments and Globe Metals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flagship and Globe is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining and Flagship Investments 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 Flagship Investments are associated (or correlated) with Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Flagship Investments i.e., Flagship Investments and Globe Metals go up and down completely randomly.
Pair Corralation between Flagship Investments and Globe Metals
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.29 times more return on investment than Globe Metals. However, Flagship Investments is 3.5 times less risky than Globe Metals. It trades about 0.08 of its potential returns per unit of risk. Globe Metals Mining is currently generating about -0.01 per unit of risk. If you would invest 183.00 in Flagship Investments on October 17, 2024 and sell it today you would earn a total of 31.00 from holding Flagship Investments or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Globe Metals Mining
Performance |
| Timeline |
| Flagship Investments |
| Globe Metals Mining |
Flagship Investments and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Globe Metals
The main advantage of trading using opposite Flagship Investments and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Globe Metals 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 Metals will offset losses from the drop in Globe Metals' long position.| Flagship Investments vs. Neurotech International | Flagship Investments vs. Zoom2u Technologies | Flagship Investments vs. RLF AgTech | Flagship Investments vs. Readytech Holdings |
| Globe Metals vs. Sonic Healthcare | Globe Metals vs. Hotel Property Investments | Globe Metals vs. Pinnacle Investment Management | Globe Metals vs. Flagship Investments |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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