Correlation Between Globe Trade and Mlk Foods
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Mlk Foods 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 Mlk Foods 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 Mlk Foods Public, you can compare the effects of market volatilities on Globe Trade and Mlk Foods 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 Mlk Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Mlk Foods.
Diversification Opportunities for Globe Trade and Mlk Foods
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Globe and Mlk is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Mlk Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mlk Foods Public 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 Mlk Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mlk Foods Public has no effect on the direction of Globe Trade i.e., Globe Trade and Mlk Foods go up and down completely randomly.
Pair Corralation between Globe Trade and Mlk Foods
Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the Mlk Foods. But the stock apears to be less risky and, when comparing its historical volatility, Globe Trade Centre is 3.27 times less risky than Mlk Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Mlk Foods Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Mlk Foods Public on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Mlk Foods Public or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Mlk Foods Public
Performance |
| Timeline |
| Globe Trade Centre |
| Mlk Foods Public |
Globe Trade and Mlk Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Mlk Foods
The main advantage of trading using opposite Globe Trade and Mlk Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Mlk Foods 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 Mlk Foods will offset losses from the drop in Mlk Foods' long position.| Globe Trade vs. Enter Air SA | Globe Trade vs. PLAYWAY SA | Globe Trade vs. Skyline Investment SA | Globe Trade vs. Investment Friends Capital |
| Mlk Foods vs. Quantum Software SA | Mlk Foods vs. Movie Games SA | Mlk Foods vs. Carlson Investments SA | Mlk Foods vs. Globe Trade Centre |
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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