Correlation Between Global Electrical and Mobile World
Can any of the company-specific risk be diversified away by investing in both Global Electrical and Mobile World 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 Electrical and Mobile World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Electrical Technology and Mobile World Investment, you can compare the effects of market volatilities on Global Electrical and Mobile World 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 Electrical with a short position of Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Electrical and Mobile World.
Diversification Opportunities for Global Electrical and Mobile World
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Mobile is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global Electrical Technology and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World Investment and Global Electrical 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 Electrical Technology are associated (or correlated) with Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of Global Electrical i.e., Global Electrical and Mobile World go up and down completely randomly.
Pair Corralation between Global Electrical and Mobile World
Assuming the 90 days trading horizon Global Electrical Technology is expected to generate 2.39 times more return on investment than Mobile World. However, Global Electrical is 2.39 times more volatile than Mobile World Investment. It trades about 0.06 of its potential returns per unit of risk. Mobile World Investment is currently generating about 0.05 per unit of risk. If you would invest 1,754,774 in Global Electrical Technology on September 2, 2024 and sell it today you would earn a total of 895,226 from holding Global Electrical Technology or generate 51.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 65.86% |
| Values | Daily Returns |
Global Electrical Technology vs. Mobile World Investment
Performance |
| Timeline |
| Global Electrical |
| Mobile World Investment |
Global Electrical and Mobile World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Electrical and Mobile World
The main advantage of trading using opposite Global Electrical and Mobile World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Electrical position performs unexpectedly, Mobile World 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 Mobile World will offset losses from the drop in Mobile World's long position.| Global Electrical vs. DOMESCO Medical Import | Global Electrical vs. Binh Duong Trade | Global Electrical vs. Petrovietnam Technical Services | Global Electrical vs. VTC Telecommunications JSC |
| Mobile World vs. Da Nang Construction | Mobile World vs. Agriculture Printing and | Mobile World vs. Petrolimex Information Technology | Mobile World vs. Binhthuan Agriculture Services |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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