Correlation Between Planet Labs and Global Industrial
Can any of the company-specific risk be diversified away by investing in both Planet Labs and Global Industrial 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 Planet Labs and Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Labs PBC and Global Industrial Co, you can compare the effects of market volatilities on Planet Labs and Global Industrial 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 Planet Labs with a short position of Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Labs and Global Industrial.
Diversification Opportunities for Planet Labs and Global Industrial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Global is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Planet Labs PBC and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial and Planet Labs 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 Planet Labs PBC are associated (or correlated) with Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of Planet Labs i.e., Planet Labs and Global Industrial go up and down completely randomly.
Pair Corralation between Planet Labs and Global Industrial
Allowing for the 90-day total investment horizon Planet Labs PBC is expected to generate 0.95 times more return on investment than Global Industrial. However, Planet Labs PBC is 1.05 times less risky than Global Industrial. It trades about 0.33 of its potential returns per unit of risk. Global Industrial Co is currently generating about -0.08 per unit of risk. If you would invest 218.00 in Planet Labs PBC on August 26, 2024 and sell it today you would earn a total of 133.00 from holding Planet Labs PBC or generate 61.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Planet Labs PBC vs. Global Industrial Co
Performance |
| Timeline |
| Planet Labs PBC |
| Global Industrial |
Planet Labs and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Labs and Global Industrial
The main advantage of trading using opposite Planet Labs and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Labs position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial's long position.| Planet Labs vs. The Boeing | Planet Labs vs. Curtiss Wright | Planet Labs vs. Ehang Holdings | Planet Labs vs. General Dynamics |
| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial vs. BlueLinx Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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