Correlation Between Globalfoundries and J Long
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and J Long 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 Globalfoundries and J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and J Long Group Limited, you can compare the effects of market volatilities on Globalfoundries and J Long 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 Globalfoundries with a short position of J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and J Long.
Diversification Opportunities for Globalfoundries and J Long
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globalfoundries and J Long is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and Globalfoundries 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 Globalfoundries are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Globalfoundries i.e., Globalfoundries and J Long go up and down completely randomly.
Pair Corralation between Globalfoundries and J Long
Considering the 90-day investment horizon Globalfoundries is expected to generate 0.28 times more return on investment than J Long. However, Globalfoundries is 3.57 times less risky than J Long. It trades about 0.05 of its potential returns per unit of risk. J Long Group Limited is currently generating about 0.01 per unit of risk. If you would invest 4,196 in Globalfoundries on September 4, 2024 and sell it today you would earn a total of 316.00 from holding Globalfoundries or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. J Long Group Limited
Performance |
| Timeline |
| Globalfoundries |
| J Long Group |
Globalfoundries and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and J Long
The main advantage of trading using opposite Globalfoundries and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| J Long vs. Advanced Micro Devices | J Long vs. United States Steel | J Long vs. Ironveld Plc | J Long vs. Globalfoundries |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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