Correlation Between Globlex Holding and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both Globlex Holding and Eastern Commercial 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 Globlex Holding and Eastern Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globlex Holding Management and Eastern Commercial Leasing, you can compare the effects of market volatilities on Globlex Holding and Eastern Commercial 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 Globlex Holding with a short position of Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globlex Holding and Eastern Commercial.
Diversification Opportunities for Globlex Holding and Eastern Commercial
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Globlex and Eastern is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Globlex Holding Management and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial and Globlex Holding 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 Globlex Holding Management are associated (or correlated) with Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of Globlex Holding i.e., Globlex Holding and Eastern Commercial go up and down completely randomly.
Pair Corralation between Globlex Holding and Eastern Commercial
Assuming the 90 days trading horizon Globlex Holding Management is expected to under-perform the Eastern Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Globlex Holding Management is 1.54 times less risky than Eastern Commercial. The stock trades about -0.34 of its potential returns per unit of risk. The Eastern Commercial Leasing is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Eastern Commercial Leasing on August 25, 2024 and sell it today you would lose (3.00) from holding Eastern Commercial Leasing or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Globlex Holding Management vs. Eastern Commercial Leasing
Performance |
| Timeline |
| Globlex Holding Mana |
| Eastern Commercial |
Globlex Holding and Eastern Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globlex Holding and Eastern Commercial
The main advantage of trading using opposite Globlex Holding and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globlex Holding position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.| Globlex Holding vs. Thai Energy Storage | Globlex Holding vs. Royal Orchid Hotel | Globlex Holding vs. Grand Canal Land | Globlex Holding vs. PRG Public |
| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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