Correlation Between Kolibri Global and GMO Internet
Can any of the company-specific risk be diversified away by investing in both Kolibri Global and GMO Internet 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 Kolibri Global and GMO Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolibri Global Energy and GMO Internet, you can compare the effects of market volatilities on Kolibri Global and GMO Internet 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 Kolibri Global with a short position of GMO Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolibri Global and GMO Internet.
Diversification Opportunities for Kolibri Global and GMO Internet
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kolibri and GMO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kolibri Global Energy and GMO Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMO Internet and Kolibri 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 Kolibri Global Energy are associated (or correlated) with GMO Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMO Internet has no effect on the direction of Kolibri Global i.e., Kolibri Global and GMO Internet go up and down completely randomly.
Pair Corralation between Kolibri Global and GMO Internet
Given the investment horizon of 90 days Kolibri Global Energy is expected to generate 2.25 times more return on investment than GMO Internet. However, Kolibri Global is 2.25 times more volatile than GMO Internet. It trades about 0.47 of its potential returns per unit of risk. GMO Internet is currently generating about -0.09 per unit of risk. If you would invest 544.00 in Kolibri Global Energy on October 25, 2024 and sell it today you would earn a total of 192.00 from holding Kolibri Global Energy or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kolibri Global Energy vs. GMO Internet
Performance |
| Timeline |
| Kolibri Global Energy |
| GMO Internet |
Kolibri Global and GMO Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolibri Global and GMO Internet
The main advantage of trading using opposite Kolibri Global and GMO Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolibri Global position performs unexpectedly, GMO Internet 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 GMO Internet will offset losses from the drop in GMO Internet's long position.| Kolibri Global vs. WPP PLC ADR | Kolibri Global vs. Global E Online | Kolibri Global vs. National CineMedia | Kolibri Global vs. Entravision Communications |
| GMO Internet vs. Cable One | GMO Internet vs. Charter Communications | GMO Internet vs. Frontier Communications Parent | GMO Internet vs. Liberty Broadband Srs |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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