Correlation Between Globex Mining and Transalta
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Transalta 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 Transalta 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 Transalta A Cum, you can compare the effects of market volatilities on Globex Mining and Transalta 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 Transalta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Transalta.
Diversification Opportunities for Globex Mining and Transalta
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Globex and Transalta is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Transalta A Cum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transalta A Cum 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 Transalta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transalta A Cum has no effect on the direction of Globex Mining i.e., Globex Mining and Transalta go up and down completely randomly.
Pair Corralation between Globex Mining and Transalta
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 4.61 times more return on investment than Transalta. However, Globex Mining is 4.61 times more volatile than Transalta A Cum. It trades about 0.16 of its potential returns per unit of risk. Transalta A Cum is currently generating about 0.33 per unit of risk. If you would invest 103.00 in Globex Mining Enterprises on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Globex Mining Enterprises or generate 7.77% 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. Transalta A Cum
Performance |
| Timeline |
| Globex Mining Enterprises |
| Transalta A Cum |
Globex Mining and Transalta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Transalta
The main advantage of trading using opposite Globex Mining and Transalta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Transalta 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 Transalta will offset losses from the drop in Transalta'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 |
| Transalta vs. Richelieu Hardware | Transalta vs. Datable Technology Corp | Transalta vs. Constellation Software | Transalta vs. Data Communications Management |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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