Correlation Between Kool2play and Globe Trade
Can any of the company-specific risk be diversified away by investing in both Kool2play and Globe Trade 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 Kool2play and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kool2play SA and Globe Trade Centre, you can compare the effects of market volatilities on Kool2play and Globe Trade 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 Kool2play with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kool2play and Globe Trade.
Diversification Opportunities for Kool2play and Globe Trade
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kool2play and Globe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kool2play SA and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre and Kool2play 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 Kool2play SA are associated (or correlated) with Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Kool2play i.e., Kool2play and Globe Trade go up and down completely randomly.
Pair Corralation between Kool2play and Globe Trade
Assuming the 90 days trading horizon Kool2play SA is expected to generate 13.42 times more return on investment than Globe Trade. However, Kool2play is 13.42 times more volatile than Globe Trade Centre. It trades about 0.37 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.01 per unit of risk. If you would invest 80.00 in Kool2play SA on November 29, 2024 and sell it today you would earn a total of 45.00 from holding Kool2play SA or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Kool2play SA vs. Globe Trade Centre
Performance |
| Timeline |
| Kool2play SA |
| Globe Trade Centre |
Kool2play and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kool2play and Globe Trade
The main advantage of trading using opposite Kool2play and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kool2play position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| Kool2play vs. Gamedust SA | Kool2play vs. Ultimate Games SA | Kool2play vs. Fintech SA | Kool2play vs. Inter Cars SA |
| Globe Trade vs. CI Games SA | Globe Trade vs. Investment Friends Capital | Globe Trade vs. UniCredit SpA | Globe Trade vs. Vivid Games 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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