Correlation Between GLOBUS MEDICAL-A and Continental
Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL-A and Continental 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 Continental 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 Camden Property Trust, you can compare the effects of market volatilities on GLOBUS MEDICAL-A and Continental 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 Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and Continental.
Diversification Opportunities for GLOBUS MEDICAL-A and Continental
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GLOBUS and Continental is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust 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 Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and Continental go up and down completely randomly.
Pair Corralation between GLOBUS MEDICAL-A and Continental
Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 0.93 times more return on investment than Continental. However, GLOBUS MEDICAL A is 1.07 times less risky than Continental. It trades about 0.08 of its potential returns per unit of risk. Camden Property Trust is currently generating about -0.3 per unit of risk. If you would invest 7,850 in GLOBUS MEDICAL A on October 10, 2024 and sell it today you would earn a total of 150.00 from holding GLOBUS MEDICAL A or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GLOBUS MEDICAL A vs. Camden Property Trust
Performance |
| Timeline |
| GLOBUS MEDICAL A |
| Camden Property Trust |
GLOBUS MEDICAL-A and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBUS MEDICAL-A and Continental
The main advantage of trading using opposite GLOBUS MEDICAL-A and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL-A position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.| GLOBUS MEDICAL-A vs. Materialise NV | GLOBUS MEDICAL-A vs. Martin Marietta Materials | GLOBUS MEDICAL-A vs. Air Lease | GLOBUS MEDICAL-A vs. Vulcan Materials |
| Continental vs. INVITATION HOMES DL | Continental vs. American Homes 4 | Continental vs. Superior Plus Corp | Continental vs. NMI Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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