Correlation Between Globex Mining and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on Globex Mining and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Commercial Vehicle.
Diversification Opportunities for Globex Mining and Commercial Vehicle
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globex and Commercial is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Globex Mining i.e., Globex Mining and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Globex Mining and Commercial Vehicle
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 0.59 times more return on investment than Commercial Vehicle. However, Globex Mining Enterprises is 1.69 times less risky than Commercial Vehicle. It trades about 0.5 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.12 per unit of risk. If you would invest 75.00 in Globex Mining Enterprises on October 17, 2024 and sell it today you would earn a total of 13.00 from holding Globex Mining Enterprises or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Commercial Vehicle Group
Performance |
| Timeline |
| Globex Mining Enterprises |
| Commercial Vehicle |
Globex Mining and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Commercial Vehicle
The main advantage of trading using opposite Globex Mining and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
| Commercial Vehicle vs. FIRST SHIP LEASE | Commercial Vehicle vs. Forsys Metals Corp | Commercial Vehicle vs. GRENKELEASING Dusseldorf | Commercial Vehicle 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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