Correlation Between MLP Group and Globe Trade
Can any of the company-specific risk be diversified away by investing in both MLP Group 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 MLP Group and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MLP Group SA and Globe Trade Centre, you can compare the effects of market volatilities on MLP Group 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 MLP Group with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of MLP Group and Globe Trade.
Diversification Opportunities for MLP Group and Globe Trade
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MLP and Globe is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MLP Group 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 MLP Group 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 MLP Group 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 MLP Group i.e., MLP Group and Globe Trade go up and down completely randomly.
Pair Corralation between MLP Group and Globe Trade
Assuming the 90 days trading horizon MLP Group SA is expected to generate 0.72 times more return on investment than Globe Trade. However, MLP Group SA is 1.38 times less risky than Globe Trade. It trades about 0.01 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 7,800 in MLP Group SA on August 27, 2024 and sell it today you would lose (140.00) from holding MLP Group SA or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MLP Group SA vs. Globe Trade Centre
Performance |
| Timeline |
| MLP Group SA |
| Globe Trade Centre |
MLP Group and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MLP Group and Globe Trade
The main advantage of trading using opposite MLP Group and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MLP Group 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.| MLP Group vs. Globe Trade Centre | MLP Group vs. Asseco Business Solutions | MLP Group vs. Detalion Games SA | MLP Group vs. Asseco South Eastern |
| Globe Trade vs. Asseco Business Solutions | Globe Trade vs. Detalion Games SA | Globe Trade vs. Asseco South Eastern | Globe Trade vs. CFI Holding 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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