Correlation Between Globe Trade and Vakomtek
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Vakomtek 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 Vakomtek 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 Vakomtek, you can compare the effects of market volatilities on Globe Trade and Vakomtek 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 Vakomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Vakomtek.
Diversification Opportunities for Globe Trade and Vakomtek
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globe and Vakomtek is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Vakomtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakomtek 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 Vakomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakomtek has no effect on the direction of Globe Trade i.e., Globe Trade and Vakomtek go up and down completely randomly.
Pair Corralation between Globe Trade and Vakomtek
Assuming the 90 days trading horizon Globe Trade is expected to generate 1.65 times less return on investment than Vakomtek. In addition to that, Globe Trade is 1.14 times more volatile than Vakomtek. It trades about 0.13 of its total potential returns per unit of risk. Vakomtek is currently generating about 0.25 per unit of volatility. If you would invest 92.00 in Vakomtek on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Vakomtek or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 23.81% |
| Values | Daily Returns |
Globe Trade Centre vs. Vakomtek
Performance |
| Timeline |
| Globe Trade Centre |
| Vakomtek |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Globe Trade and Vakomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Vakomtek
The main advantage of trading using opposite Globe Trade and Vakomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Vakomtek 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 Vakomtek will offset losses from the drop in Vakomtek's long position.| Globe Trade vs. Asseco Business Solutions | Globe Trade vs. Detalion Games SA | Globe Trade vs. CFI Holding SA | Globe Trade vs. HM Inwest SA |
| Vakomtek vs. MW Trade SA | Vakomtek vs. Globe Trade Centre | Vakomtek vs. LSI Software SA | Vakomtek vs. Road Studio 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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