Correlation Between Globex Mining and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Globex Mining and MEDICAL FACILITIES 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 Globex Mining and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Globex Mining and MEDICAL FACILITIES 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 Globex Mining with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and MEDICAL FACILITIES.
Diversification Opportunities for Globex Mining and MEDICAL FACILITIES
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and MEDICAL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Globex Mining i.e., Globex Mining and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Globex Mining and MEDICAL FACILITIES
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 0.72 times more return on investment than MEDICAL FACILITIES. However, Globex Mining Enterprises is 1.4 times less risky than MEDICAL FACILITIES. It trades about 0.46 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about -0.01 per unit of risk. If you would invest 76.00 in Globex Mining Enterprises on October 20, 2024 and sell it today you would earn a total of 12.00 from holding Globex Mining Enterprises or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Globex Mining Enterprises |
| MEDICAL FACILITIES NEW |
Globex Mining and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and MEDICAL FACILITIES
The main advantage of trading using opposite Globex Mining and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
| MEDICAL FACILITIES vs. AIR PRODCHEMICALS | MEDICAL FACILITIES vs. KIMBALL ELECTRONICS | MEDICAL FACILITIES vs. STMICROELECTRONICS | MEDICAL FACILITIES vs. Globex Mining Enterprises |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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