Correlation Between Globex Mining and Bald Eagle
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Bald Eagle 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 Bald Eagle 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 Bald Eagle Gold, you can compare the effects of market volatilities on Globex Mining and Bald Eagle 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 Bald Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Bald Eagle.
Diversification Opportunities for Globex Mining and Bald Eagle
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globex and Bald is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold 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 Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of Globex Mining i.e., Globex Mining and Bald Eagle go up and down completely randomly.
Pair Corralation between Globex Mining and Bald Eagle
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 0.42 times more return on investment than Bald Eagle. However, Globex Mining Enterprises is 2.37 times less risky than Bald Eagle. It trades about 0.03 of its potential returns per unit of risk. Bald Eagle Gold is currently generating about -0.02 per unit of risk. If you would invest 98.00 in Globex Mining Enterprises on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Globex Mining Enterprises or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Bald Eagle Gold
Performance |
| Timeline |
| Globex Mining Enterprises |
| Bald Eagle Gold |
Globex Mining and Bald Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Bald Eagle
The main advantage of trading using opposite Globex Mining and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Bald Eagle 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 Bald Eagle will offset losses from the drop in Bald Eagle's long position.| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper Corp |
| Bald Eagle vs. Quorum Information Technologies | Bald Eagle vs. Algonquin Power Utilities | Bald Eagle vs. Datable Technology Corp | Bald Eagle vs. Rogers Communications |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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