Correlation Between Globe Metals and People Infrastructure
Can any of the company-specific risk be diversified away by investing in both Globe Metals and People Infrastructure 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 People Infrastructure 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 People Infrastructure, you can compare the effects of market volatilities on Globe Metals and People Infrastructure 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 People Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and People Infrastructure.
Diversification Opportunities for Globe Metals and People Infrastructure
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and People is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and People Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Infrastructure 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 People Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Infrastructure has no effect on the direction of Globe Metals i.e., Globe Metals and People Infrastructure go up and down completely randomly.
Pair Corralation between Globe Metals and People Infrastructure
Assuming the 90 days trading horizon Globe Metals Mining is expected to under-perform the People Infrastructure. In addition to that, Globe Metals is 1.6 times more volatile than People Infrastructure. It trades about -0.01 of its total potential returns per unit of risk. People Infrastructure is currently generating about 0.38 per unit of volatility. If you would invest 81.00 in People Infrastructure on September 14, 2024 and sell it today you would earn a total of 18.00 from holding People Infrastructure or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Metals Mining vs. People Infrastructure
Performance |
| Timeline |
| Globe Metals Mining |
| People Infrastructure |
Globe Metals and People Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and People Infrastructure
The main advantage of trading using opposite Globe Metals and People Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals position performs unexpectedly, People Infrastructure 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 People Infrastructure will offset losses from the drop in People Infrastructure's long position.| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. Sandfire Resources NL |
| People Infrastructure vs. Insignia Financial | People Infrastructure vs. Magellan Financial Group | People Infrastructure vs. Aurelia Metals | People Infrastructure vs. Black Rock 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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