Correlation Between Globe Trade and Noble Financials
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Noble Financials 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 Globe Trade and Noble Financials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and Noble Financials SA, you can compare the effects of market volatilities on Globe Trade and Noble Financials 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 Globe Trade with a short position of Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Noble Financials.
Diversification Opportunities for Globe Trade and Noble Financials
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Globe and Noble is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials and Globe Trade 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 Globe Trade Centre are associated (or correlated) with Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of Globe Trade i.e., Globe Trade and Noble Financials go up and down completely randomly.
Pair Corralation between Globe Trade and Noble Financials
Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the Noble Financials. But the stock apears to be less risky and, when comparing its historical volatility, Globe Trade Centre is 2.12 times less risky than Noble Financials. The stock trades about -0.03 of its potential returns per unit of risk. The Noble Financials SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,220 in Noble Financials SA on August 27, 2024 and sell it today you would earn a total of 400.00 from holding Noble Financials SA or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Noble Financials SA
Performance |
| Timeline |
| Globe Trade Centre |
| Noble Financials |
Globe Trade and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Noble Financials
The main advantage of trading using opposite Globe Trade and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.| Globe Trade vs. Asseco Business Solutions | Globe Trade vs. Detalion Games SA | Globe Trade vs. Asseco South Eastern | Globe Trade vs. CFI Holding SA |
| Noble Financials vs. Globe Trade Centre | Noble Financials vs. Asseco Business Solutions | Noble Financials vs. Detalion Games SA | Noble Financials vs. Asseco South Eastern |
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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