Correlation Between Globe Metals and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Globe Metals and Ras Technology 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 Ras Technology 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 Ras Technology Holdings, you can compare the effects of market volatilities on Globe Metals and Ras Technology 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 Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Ras Technology.
Diversification Opportunities for Globe Metals and Ras Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Globe and Ras is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and Ras Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ras Technology Holdings 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 Ras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ras Technology Holdings has no effect on the direction of Globe Metals i.e., Globe Metals and Ras Technology go up and down completely randomly.
Pair Corralation between Globe Metals and Ras Technology
Assuming the 90 days trading horizon Globe Metals Mining is expected to generate 0.98 times more return on investment than Ras Technology. However, Globe Metals Mining is 1.02 times less risky than Ras Technology. It trades about -0.01 of its potential returns per unit of risk. Ras Technology Holdings is currently generating about -0.37 per unit of risk. If you would invest 4.20 in Globe Metals Mining on September 14, 2024 and sell it today you would lose (0.10) from holding Globe Metals Mining or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Metals Mining vs. Ras Technology Holdings
Performance |
| Timeline |
| Globe Metals Mining |
| Ras Technology Holdings |
Globe Metals and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Ras Technology
The main advantage of trading using opposite Globe Metals and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals position performs unexpectedly, Ras Technology 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 Ras Technology will offset losses from the drop in Ras Technology'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 |
| Ras Technology vs. Collins Foods | Ras Technology vs. Kip McGrath Education | Ras Technology vs. Hotel Property Investments | Ras Technology vs. COAST ENTERTAINMENT HOLDINGS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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