Correlation Between Globe Metals and Albion Resources
Can any of the company-specific risk be diversified away by investing in both Globe Metals and Albion Resources 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 Metals and Albion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Metals Mining and Albion Resources Limited, you can compare the effects of market volatilities on Globe Metals and Albion Resources 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 Metals with a short position of Albion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Albion Resources.
Diversification Opportunities for Globe Metals and Albion Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globe and Albion is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and Albion Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Resources and Globe Metals 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 Metals Mining are associated (or correlated) with Albion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Resources has no effect on the direction of Globe Metals i.e., Globe Metals and Albion Resources go up and down completely randomly.
Pair Corralation between Globe Metals and Albion Resources
Assuming the 90 days trading horizon Globe Metals Mining is expected to generate 2.0 times more return on investment than Albion Resources. However, Globe Metals is 2.0 times more volatile than Albion Resources Limited. It trades about 0.02 of its potential returns per unit of risk. Albion Resources Limited is currently generating about -0.07 per unit of risk. If you would invest 3.60 in Globe Metals Mining on November 3, 2024 and sell it today you would lose (0.20) from holding Globe Metals Mining or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Globe Metals Mining vs. Albion Resources Limited
Performance |
| Timeline |
| Globe Metals Mining |
| Albion Resources |
Globe Metals and Albion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Albion Resources
The main advantage of trading using opposite Globe Metals and Albion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals position performs unexpectedly, Albion Resources 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 Albion Resources will offset losses from the drop in Albion Resources' long position.| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. Sandfire Resources NL |
| Albion Resources vs. Charter Hall Education | Albion Resources vs. COG Financial Services | Albion Resources vs. Kkr Credit Income | Albion Resources vs. Credit Clear |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |