Correlation Between Globex Mining and Winpak
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Winpak 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 Winpak 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 Winpak, you can compare the effects of market volatilities on Globex Mining and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Winpak.
Diversification Opportunities for Globex Mining and Winpak
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globex and Winpak is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Globex Mining i.e., Globex Mining and Winpak go up and down completely randomly.
Pair Corralation between Globex Mining and Winpak
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 2.26 times more return on investment than Winpak. However, Globex Mining is 2.26 times more volatile than Winpak. It trades about 0.17 of its potential returns per unit of risk. Winpak is currently generating about 0.12 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 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Winpak
Performance |
| Timeline |
| Globex Mining Enterprises |
| Winpak |
Globex Mining and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Winpak
The main advantage of trading using opposite Globex Mining and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak'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 |
| Winpak vs. Globex Mining Enterprises | Winpak vs. Guru Organic Energy | Winpak vs. Aya Gold Silver | Winpak vs. Metalero Mining 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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