Correlation Between Global Payments and Frontera
Can any of the company-specific risk be diversified away by investing in both Global Payments and Frontera 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 Global Payments and Frontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Payments and Frontera Group, you can compare the effects of market volatilities on Global Payments and Frontera 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 Global Payments with a short position of Frontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and Frontera.
Diversification Opportunities for Global Payments and Frontera
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Frontera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and Frontera Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Group and Global Payments 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 Global Payments are associated (or correlated) with Frontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Group has no effect on the direction of Global Payments i.e., Global Payments and Frontera go up and down completely randomly.
Pair Corralation between Global Payments and Frontera
If you would invest 11,190 in Global Payments on November 3, 2024 and sell it today you would earn a total of 95.00 from holding Global Payments or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Payments vs. Frontera Group
Performance |
| Timeline |
| Global Payments |
| Frontera Group |
Global Payments and Frontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Payments and Frontera
The main advantage of trading using opposite Global Payments and Frontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Payments position performs unexpectedly, Frontera 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 Frontera will offset losses from the drop in Frontera's long position.| Global Payments vs. Copart Inc | Global Payments vs. ABM Industries Incorporated | Global Payments vs. Thomson Reuters Corp | Global Payments vs. Aramark Holdings |
| Frontera vs. XCPCNL Business Services | Frontera vs. International Consolidated Companies | Frontera vs. Global Payments | Frontera vs. Mills Music Trust |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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