Correlation Between Global Crossing and Altai Resources
Can any of the company-specific risk be diversified away by investing in both Global Crossing and Altai Resources 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 Global Crossing and Altai Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Crossing Airlines and Altai Resources, you can compare the effects of market volatilities on Global Crossing and Altai Resources 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 Global Crossing with a short position of Altai Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Crossing and Altai Resources.
Diversification Opportunities for Global Crossing and Altai Resources
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Altai is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global Crossing Airlines and Altai Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altai Resources and Global Crossing 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 Global Crossing Airlines are associated (or correlated) with Altai Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altai Resources has no effect on the direction of Global Crossing i.e., Global Crossing and Altai Resources go up and down completely randomly.
Pair Corralation between Global Crossing and Altai Resources
Assuming the 90 days trading horizon Global Crossing Airlines is expected to generate 1.63 times more return on investment than Altai Resources. However, Global Crossing is 1.63 times more volatile than Altai Resources. It trades about 0.45 of its potential returns per unit of risk. Altai Resources is currently generating about 0.21 per unit of risk. If you would invest 61.00 in Global Crossing Airlines on November 3, 2024 and sell it today you would earn a total of 45.00 from holding Global Crossing Airlines or generate 73.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Crossing Airlines vs. Altai Resources
Performance |
| Timeline |
| Global Crossing Airlines |
| Altai Resources |
Global Crossing and Altai Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Crossing and Altai Resources
The main advantage of trading using opposite Global Crossing and Altai Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Crossing position performs unexpectedly, Altai Resources 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 Altai Resources will offset losses from the drop in Altai Resources' long position.| Global Crossing vs. Exco Technologies Limited | Global Crossing vs. Canlan Ice Sports | Global Crossing vs. Titanium Transportation Group | Global Crossing vs. Pace Metals |
| Altai Resources vs. Air Canada | Altai Resources vs. Oncolytics Biotech | Altai Resources vs. Brookfield Asset Management | Altai Resources vs. Titanium Transportation Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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