Correlation Between Global Lights and Alpha One
Can any of the company-specific risk be diversified away by investing in both Global Lights and Alpha One 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 Global Lights and Alpha One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Lights Acquisition and Alpha One, you can compare the effects of market volatilities on Global Lights and Alpha One 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 Global Lights with a short position of Alpha One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Lights and Alpha One.
Diversification Opportunities for Global Lights and Alpha One
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Lights Acquisition and Alpha One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha One and Global Lights 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 Global Lights Acquisition are associated (or correlated) with Alpha One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha One has no effect on the direction of Global Lights i.e., Global Lights and Alpha One go up and down completely randomly.
Pair Corralation between Global Lights and Alpha One
Given the investment horizon of 90 days Global Lights is expected to generate 12.99 times less return on investment than Alpha One. But when comparing it to its historical volatility, Global Lights Acquisition is 20.95 times less risky than Alpha One. It trades about 0.14 of its potential returns per unit of risk. Alpha One is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Alpha One on September 12, 2024 and sell it today you would earn a total of 138.00 from holding Alpha One or generate 138.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 72.52% |
| Values | Daily Returns |
Global Lights Acquisition vs. Alpha One
Performance |
| Timeline |
| Global Lights Acquisition |
| Alpha One |
Global Lights and Alpha One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Lights and Alpha One
The main advantage of trading using opposite Global Lights and Alpha One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Lights position performs unexpectedly, Alpha One 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 Alpha One will offset losses from the drop in Alpha One's long position.| Global Lights vs. HUMANA INC | Global Lights vs. Barloworld Ltd ADR | Global Lights vs. Morningstar Unconstrained Allocation | Global Lights vs. Thrivent High Yield |
| Alpha One vs. Green Planet Bio | Alpha One vs. Azure Holding Group | Alpha One vs. Four Leaf Acquisition | Alpha One vs. Opus Magnum Ameris |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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