Correlation Between Global E and ODP Corp
Can any of the company-specific risk be diversified away by investing in both Global E and ODP Corp 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 E and ODP Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and ODP Corp, you can compare the effects of market volatilities on Global E and ODP Corp 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 E with a short position of ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and ODP Corp.
Diversification Opportunities for Global E and ODP Corp
Excellent diversification
The 3 months correlation between Global and ODP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp and Global E 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 E Online are associated (or correlated) with ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of Global E i.e., Global E and ODP Corp go up and down completely randomly.
Pair Corralation between Global E and ODP Corp
Given the investment horizon of 90 days Global E Online is expected to generate 0.83 times more return on investment than ODP Corp. However, Global E Online is 1.2 times less risky than ODP Corp. It trades about 0.06 of its potential returns per unit of risk. ODP Corp is currently generating about -0.06 per unit of risk. If you would invest 3,986 in Global E Online on September 12, 2024 and sell it today you would earn a total of 1,366 from holding Global E Online or generate 34.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. ODP Corp
Performance |
| Timeline |
| Global E Online |
| ODP Corp |
Global E and ODP Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and ODP Corp
The main advantage of trading using opposite Global E and ODP Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, ODP Corp 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 ODP Corp will offset losses from the drop in ODP Corp's long position.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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