Correlation Between Information Services and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Information Services and Globex Mining 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 Information Services and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services and Globex Mining Enterprises, you can compare the effects of market volatilities on Information Services and Globex Mining 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 Information Services with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Globex Mining.
Diversification Opportunities for Information Services and Globex Mining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Information and Globex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Information Services and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Information Services 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 Information Services are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Information Services i.e., Information Services and Globex Mining go up and down completely randomly.
Pair Corralation between Information Services and Globex Mining
Assuming the 90 days trading horizon Information Services is expected to under-perform the Globex Mining. But the stock apears to be less risky and, when comparing its historical volatility, Information Services is 2.09 times less risky than Globex Mining. The stock trades about -0.16 of its potential returns per unit of risk. The Globex Mining Enterprises is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Globex Mining Enterprises on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Globex Mining Enterprises or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services vs. Globex Mining Enterprises
Performance |
| Timeline |
| Information Services |
| Globex Mining Enterprises |
Information Services and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Globex Mining
The main advantage of trading using opposite Information Services and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Information Services vs. Pollard Banknote Limited | Information Services vs. K Bro Linen | Information Services vs. Calian Technologies | Information Services vs. Evertz Technologies Limited |
| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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