Correlation Between Globex Mining and Easy Software
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Easy Software 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 Easy Software 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 Easy Software AG, you can compare the effects of market volatilities on Globex Mining and Easy Software 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 Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Easy Software.
Diversification Opportunities for Globex Mining and Easy Software
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and Easy is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of Globex Mining i.e., Globex Mining and Easy Software go up and down completely randomly.
Pair Corralation between Globex Mining and Easy Software
Assuming the 90 days trading horizon Globex Mining is expected to generate 1.19 times less return on investment than Easy Software. But when comparing it to its historical volatility, Globex Mining Enterprises is 2.06 times less risky than Easy Software. It trades about 0.36 of its potential returns per unit of risk. Easy Software AG is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Easy Software AG on October 11, 2024 and sell it today you would earn a total of 330.00 from holding Easy Software AG or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Easy Software AG
Performance |
| Timeline |
| Globex Mining Enterprises |
| Easy Software AG |
Globex Mining and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Easy Software
The main advantage of trading using opposite Globex Mining and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Easy Software 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 Easy Software will offset losses from the drop in Easy Software's long position.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
| Easy Software vs. TEXAS ROADHOUSE | Easy Software vs. EVS Broadcast Equipment | Easy Software vs. Renesas Electronics | Easy Software vs. URBAN OUTFITTERS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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