Correlation Between Globex Mining and Group Ten
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Group Ten 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 Globex Mining and Group Ten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Group Ten Metals, you can compare the effects of market volatilities on Globex Mining and Group Ten 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 Globex Mining with a short position of Group Ten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Group Ten.
Diversification Opportunities for Globex Mining and Group Ten
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globex and Group is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Group Ten Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Ten Metals and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Group Ten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Ten Metals has no effect on the direction of Globex Mining i.e., Globex Mining and Group Ten go up and down completely randomly.
Pair Corralation between Globex Mining and Group Ten
Assuming the 90 days horizon Globex Mining Enterprises is expected to generate 0.24 times more return on investment than Group Ten. However, Globex Mining Enterprises is 4.22 times less risky than Group Ten. It trades about 0.04 of its potential returns per unit of risk. Group Ten Metals is currently generating about -0.1 per unit of risk. If you would invest 76.00 in Globex Mining Enterprises on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Globex Mining Enterprises or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Group Ten Metals
Performance |
| Timeline |
| Globex Mining Enterprises |
| Group Ten Metals |
Globex Mining and Group Ten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Group Ten
The main advantage of trading using opposite Globex Mining and Group Ten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Group Ten 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 Group Ten will offset losses from the drop in Group Ten's long position.| Globex Mining vs. Silver Hammer Mining | Globex Mining vs. Reyna Silver Corp | Globex Mining vs. Guanajuato Silver | Globex Mining vs. Silver One Resources |
| Group Ten vs. Ascendant Resources | Group Ten vs. Atico Mining | Group Ten vs. Prime Mining Corp | Group Ten vs. Wallbridge Mining |
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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