Correlation Between Globe Trade and Skyline Investment
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Skyline Investment 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 Skyline Investment 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 Skyline Investment SA, you can compare the effects of market volatilities on Globe Trade and Skyline Investment 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 Skyline Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Skyline Investment.
Diversification Opportunities for Globe Trade and Skyline Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Globe and Skyline is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Skyline Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyline Investment 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 Skyline Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyline Investment has no effect on the direction of Globe Trade i.e., Globe Trade and Skyline Investment go up and down completely randomly.
Pair Corralation between Globe Trade and Skyline Investment
Assuming the 90 days trading horizon Globe Trade Centre is expected to generate 1.16 times more return on investment than Skyline Investment. However, Globe Trade is 1.16 times more volatile than Skyline Investment SA. It trades about 0.05 of its potential returns per unit of risk. Skyline Investment SA is currently generating about -0.08 per unit of risk. If you would invest 436.00 in Globe Trade Centre on August 24, 2024 and sell it today you would earn a total of 9.00 from holding Globe Trade Centre or generate 2.06% 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. Skyline Investment SA
Performance |
| Timeline |
| Globe Trade Centre |
| Skyline Investment |
Globe Trade and Skyline Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Skyline Investment
The main advantage of trading using opposite Globe Trade and Skyline Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Skyline Investment 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 Skyline Investment will offset losses from the drop in Skyline Investment's long position.| Globe Trade vs. Quantum Software SA | Globe Trade vs. MCI Management SA | Globe Trade vs. Bank Millennium SA | Globe Trade vs. Santander Bank Polska |
| Skyline Investment vs. PLAYWAY SA | Skyline Investment vs. Play2Chill SA | Skyline Investment vs. Movie Games SA | Skyline Investment vs. Intersport Polska SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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