Correlation Between PG E and Globe Trade
Can any of the company-specific risk be diversified away by investing in both PG E 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 PG E and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PG E P6 and Globe Trade Centre, you can compare the effects of market volatilities on PG E 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 PG E with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of PG E and Globe Trade.
Diversification Opportunities for PG E and Globe Trade
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PCG6 and Globe is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PG E P6 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 PG E 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 PG E P6 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 PG E i.e., PG E and Globe Trade go up and down completely randomly.
Pair Corralation between PG E and Globe Trade
Assuming the 90 days trading horizon PG E P6 is expected to generate 0.93 times more return on investment than Globe Trade. However, PG E P6 is 1.08 times less risky than Globe Trade. It trades about 0.05 of its potential returns per unit of risk. Globe Trade Centre is currently generating about 0.0 per unit of risk. If you would invest 1,743 in PG E P6 on September 12, 2024 and sell it today you would earn a total of 457.00 from holding PG E P6 or generate 26.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PG E P6 vs. Globe Trade Centre
Performance |
| Timeline |
| PG E P6 |
| Globe Trade Centre |
PG E and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PG E and Globe Trade
The main advantage of trading using opposite PG E and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PG E 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.| PG E vs. Ribbon Communications | PG E vs. Tower One Wireless | PG E vs. HANOVER INSURANCE | PG E vs. Safety Insurance Group |
| Globe Trade vs. Apple Inc | Globe Trade vs. Apple Inc | Globe Trade vs. Apple Inc | Globe Trade vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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