Correlation Between Heritage Global and Globalink Investment
Can any of the company-specific risk be diversified away by investing in both Heritage Global and Globalink 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 Heritage Global and Globalink Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Global and Globalink Investment Rights, you can compare the effects of market volatilities on Heritage Global and Globalink 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 Heritage Global with a short position of Globalink Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Global and Globalink Investment.
Diversification Opportunities for Heritage Global and Globalink Investment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heritage and Globalink is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Global and Globalink Investment Rights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment and Heritage Global 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 Heritage Global are associated (or correlated) with Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment has no effect on the direction of Heritage Global i.e., Heritage Global and Globalink Investment go up and down completely randomly.
Pair Corralation between Heritage Global and Globalink Investment
Given the investment horizon of 90 days Heritage Global is expected to under-perform the Globalink Investment. But the stock apears to be less risky and, when comparing its historical volatility, Heritage Global is 52.58 times less risky than Globalink Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Globalink Investment Rights is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3.85 in Globalink Investment Rights on September 3, 2024 and sell it today you would earn a total of 11.15 from holding Globalink Investment Rights or generate 289.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.23% |
| Values | Daily Returns |
Heritage Global vs. Globalink Investment Rights
Performance |
| Timeline |
| Heritage Global |
| Globalink Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Heritage Global and Globalink Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Global and Globalink Investment
The main advantage of trading using opposite Heritage Global and Globalink Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Global position performs unexpectedly, Globalink 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 Globalink Investment will offset losses from the drop in Globalink Investment's long position.| Heritage Global vs. Scully Royalty | Heritage Global vs. Mercurity Fintech Holding | Heritage Global vs. Oppenheimer Holdings | Heritage Global vs. Nomura Holdings ADR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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