Correlation Between Globex Mining and Sabio Holdings
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Sabio Holdings 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 Sabio Holdings 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 Sabio Holdings, you can compare the effects of market volatilities on Globex Mining and Sabio Holdings 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 Sabio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Sabio Holdings.
Diversification Opportunities for Globex Mining and Sabio Holdings
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Globex and Sabio is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings 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 Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Globex Mining i.e., Globex Mining and Sabio Holdings go up and down completely randomly.
Pair Corralation between Globex Mining and Sabio Holdings
Assuming the 90 days trading horizon Globex Mining is expected to generate 16.22 times less return on investment than Sabio Holdings. But when comparing it to its historical volatility, Globex Mining Enterprises is 2.58 times less risky than Sabio Holdings. It trades about 0.01 of its potential returns per unit of risk. Sabio Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Sabio Holdings on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Sabio Holdings or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Sabio Holdings
Performance |
| Timeline |
| Globex Mining Enterprises |
| Sabio Holdings |
Globex Mining and Sabio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Sabio Holdings
The main advantage of trading using opposite Globex Mining and Sabio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Sabio Holdings 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 Sabio Holdings will offset losses from the drop in Sabio Holdings' 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 |
| Sabio Holdings vs. Forsys Metals Corp | Sabio Holdings vs. Sparx Technology | Sabio Holdings vs. Bird Construction | Sabio Holdings vs. North American Construction |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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