Correlation Between Globe Trade and Corporate Office
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Corporate Office 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 Globe Trade and Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and Corporate Office Properties, you can compare the effects of market volatilities on Globe Trade and Corporate Office 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 Globe Trade with a short position of Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Corporate Office.
Diversification Opportunities for Globe Trade and Corporate Office
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Corporate is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro and Globe Trade 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 Globe Trade Centre are associated (or correlated) with Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of Globe Trade i.e., Globe Trade and Corporate Office go up and down completely randomly.
Pair Corralation between Globe Trade and Corporate Office
Assuming the 90 days trading horizon Globe Trade Centre is expected to generate 0.57 times more return on investment than Corporate Office. However, Globe Trade Centre is 1.76 times less risky than Corporate Office. It trades about 0.0 of its potential returns per unit of risk. Corporate Office Properties is currently generating about -0.22 per unit of risk. If you would invest 93.00 in Globe Trade Centre on December 11, 2024 and sell it today you would earn a total of 0.00 from holding Globe Trade Centre or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Corporate Office Properties
Performance |
| Timeline |
| Globe Trade Centre |
| Corporate Office Pro |
Globe Trade and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Corporate Office
The main advantage of trading using opposite Globe Trade and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| Globe Trade vs. LAir Liquide SA | Globe Trade vs. CHINA SOUTHN AIR H | Globe Trade vs. HEALTHSTREAM | Globe Trade vs. Molina Healthcare |
| Corporate Office vs. Penta Ocean Construction Co | Corporate Office vs. AUST AGRICULTURAL | Corporate Office vs. Beta Systems Software | Corporate Office vs. Hitachi Construction Machinery |
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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