Correlation Between Globe Metals and Global Health
Can any of the company-specific risk be diversified away by investing in both Globe Metals and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Globe Metals and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Global Health.
Diversification Opportunities for Globe Metals and Global Health
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Global is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Globe Metals i.e., Globe Metals and Global Health go up and down completely randomly.
Pair Corralation between Globe Metals and Global Health
Assuming the 90 days trading horizon Globe Metals Mining is expected to generate 1.24 times more return on investment than Global Health. However, Globe Metals is 1.24 times more volatile than Global Health. It trades about 0.03 of its potential returns per unit of risk. Global Health is currently generating about 0.01 per unit of risk. If you would invest 3.80 in Globe Metals Mining on September 26, 2024 and sell it today you would earn a total of 0.20 from holding Globe Metals Mining or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Metals Mining vs. Global Health
Performance |
| Timeline |
| Globe Metals Mining |
| Global Health |
Globe Metals and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Global Health
The main advantage of trading using opposite Globe Metals and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. Aneka Tambang Tbk |
| Global Health vs. M3 Mining | Global Health vs. Beston Global Food | Global Health vs. Globe Metals Mining | Global Health vs. Peel Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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