Correlation Between Globex Mining and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Converge Technology 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 Converge Technology 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 Converge Technology Solutions, you can compare the effects of market volatilities on Globex Mining and Converge Technology 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 Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Converge Technology.
Diversification Opportunities for Globex Mining and Converge Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globex and Converge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology 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 Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Globex Mining i.e., Globex Mining and Converge Technology go up and down completely randomly.
Pair Corralation between Globex Mining and Converge Technology
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 0.7 times more return on investment than Converge Technology. However, Globex Mining Enterprises is 1.44 times less risky than Converge Technology. It trades about 0.05 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about 0.03 per unit of risk. If you would invest 108.00 in Globex Mining Enterprises on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Globex Mining Enterprises or generate 1.85% 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. Converge Technology Solutions
Performance |
| Timeline |
| Globex Mining Enterprises |
| Converge Technology |
Globex Mining and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Converge Technology
The main advantage of trading using opposite Globex Mining and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology'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 |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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