Correlation Between Globalfoundries and Southland Holdings
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and Southland Holdings 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 Southland Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Southland Holdings, you can compare the effects of market volatilities on Globalfoundries and Southland Holdings 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 Southland Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Southland Holdings.
Diversification Opportunities for Globalfoundries and Southland Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globalfoundries and Southland is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Southland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southland Holdings 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 Southland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southland Holdings has no effect on the direction of Globalfoundries i.e., Globalfoundries and Southland Holdings go up and down completely randomly.
Pair Corralation between Globalfoundries and Southland Holdings
Considering the 90-day investment horizon Globalfoundries is expected to generate 0.57 times more return on investment than Southland Holdings. However, Globalfoundries is 1.75 times less risky than Southland Holdings. It trades about 0.06 of its potential returns per unit of risk. Southland Holdings is currently generating about 0.0 per unit of risk. If you would invest 3,989 in Globalfoundries on September 12, 2024 and sell it today you would earn a total of 394.00 from holding Globalfoundries or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. Southland Holdings
Performance |
| Timeline |
| Globalfoundries |
| Southland Holdings |
Globalfoundries and Southland Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and Southland Holdings
The main advantage of trading using opposite Globalfoundries and Southland Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, Southland Holdings 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 Southland Holdings will offset losses from the drop in Southland Holdings' long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| Southland Holdings vs. Centessa Pharmaceuticals PLC | Southland Holdings vs. Lipocine | Southland Holdings vs. Abcellera Biologics | Southland Holdings vs. BioNTech SE |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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