Correlation Between Globex Mining and Great West
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Globex Mining and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Great West.
Diversification Opportunities for Globex Mining and Great West
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globex and Great is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Globex Mining i.e., Globex Mining and Great West go up and down completely randomly.
Pair Corralation between Globex Mining and Great West
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 4.6 times more return on investment than Great West. However, Globex Mining is 4.6 times more volatile than Great West Lifeco. It trades about 0.1 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.22 per unit of risk. If you would invest 103.00 in Globex Mining Enterprises on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Globex Mining Enterprises or generate 4.85% 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. Great West Lifeco
Performance |
| Timeline |
| Globex Mining Enterprises |
| Great West Lifeco |
Globex Mining and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Great West
The main advantage of trading using opposite Globex Mining and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Globex Mining vs. Chibougamau Independent Mines | Globex Mining vs. Entree Resources | Globex Mining vs. Solitario Exploration Royalty | Globex Mining vs. Forsys Metals Corp |
| Great West vs. Aya Gold Silver | Great West vs. Profound Medical Corp | Great West vs. Globex Mining Enterprises | Great West vs. Perseus Mining |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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