Correlation Between GLOBUS MEDICAL-A and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL-A and Spirent Communications 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 GLOBUS MEDICAL-A and Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBUS MEDICAL A and Spirent Communications plc, you can compare the effects of market volatilities on GLOBUS MEDICAL-A and Spirent Communications 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 GLOBUS MEDICAL-A with a short position of Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and Spirent Communications.
Diversification Opportunities for GLOBUS MEDICAL-A and Spirent Communications
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GLOBUS and Spirent is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications and GLOBUS MEDICAL-A 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 GLOBUS MEDICAL A are associated (or correlated) with Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and Spirent Communications go up and down completely randomly.
Pair Corralation between GLOBUS MEDICAL-A and Spirent Communications
Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 1.06 times more return on investment than Spirent Communications. However, GLOBUS MEDICAL-A is 1.06 times more volatile than Spirent Communications plc. It trades about 0.28 of its potential returns per unit of risk. Spirent Communications plc is currently generating about -0.08 per unit of risk. If you would invest 7,850 in GLOBUS MEDICAL A on October 12, 2024 and sell it today you would earn a total of 800.00 from holding GLOBUS MEDICAL A or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
GLOBUS MEDICAL A vs. Spirent Communications plc
Performance |
| Timeline |
| GLOBUS MEDICAL A |
| Spirent Communications |
GLOBUS MEDICAL-A and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBUS MEDICAL-A and Spirent Communications
The main advantage of trading using opposite GLOBUS MEDICAL-A and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL-A position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| GLOBUS MEDICAL-A vs. SCANSOURCE | GLOBUS MEDICAL-A vs. Digilife Technologies Limited | GLOBUS MEDICAL-A vs. Sunny Optical Technology | GLOBUS MEDICAL-A vs. ScanSource |
| Spirent Communications vs. MEDICAL FACILITIES NEW | Spirent Communications vs. GLOBUS MEDICAL A | Spirent Communications vs. Eidesvik Offshore ASA | Spirent Communications vs. MeVis Medical Solutions |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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