Correlation Between Globex Mining and Los Andes
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Los Andes 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 Los Andes 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 Los Andes Copper, you can compare the effects of market volatilities on Globex Mining and Los Andes 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 Los Andes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Los Andes.
Diversification Opportunities for Globex Mining and Los Andes
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globex and Los is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Los Andes Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Los Andes Copper 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 Los Andes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Los Andes Copper has no effect on the direction of Globex Mining i.e., Globex Mining and Los Andes go up and down completely randomly.
Pair Corralation between Globex Mining and Los Andes
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 0.59 times more return on investment than Los Andes. However, Globex Mining Enterprises is 1.69 times less risky than Los Andes. It trades about 0.08 of its potential returns per unit of risk. Los Andes Copper is currently generating about -0.07 per unit of risk. If you would invest 108.00 in Globex Mining Enterprises on September 15, 2024 and sell it today you would earn a total of 4.00 from holding Globex Mining Enterprises or generate 3.7% 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. Los Andes Copper
Performance |
| Timeline |
| Globex Mining Enterprises |
| Los Andes Copper |
Globex Mining and Los Andes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Los Andes
The main advantage of trading using opposite Globex Mining and Los Andes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Los Andes 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 Los Andes will offset losses from the drop in Los Andes' long position.| Globex Mining vs. Foraco International SA | Globex Mining vs. Geodrill Limited | Globex Mining vs. Major Drilling Group | Globex Mining vs. Bri Chem Corp |
| Los Andes vs. Getty Copper | Los Andes vs. Marimaca Copper Corp | Los Andes vs. Globex Mining Enterprises | Los Andes vs. Arbor Metals Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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