Correlation Between PULSION Medical and GLOBUS MEDICAL-A
Can any of the company-specific risk be diversified away by investing in both PULSION Medical and GLOBUS MEDICAL-A 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 PULSION Medical and GLOBUS MEDICAL-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and GLOBUS MEDICAL A, you can compare the effects of market volatilities on PULSION Medical and GLOBUS MEDICAL-A 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 PULSION Medical with a short position of GLOBUS MEDICAL-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and GLOBUS MEDICAL-A.
Diversification Opportunities for PULSION Medical and GLOBUS MEDICAL-A
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PULSION and GLOBUS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A and PULSION Medical 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 PULSION Medical Systems are associated (or correlated) with GLOBUS MEDICAL-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of PULSION Medical i.e., PULSION Medical and GLOBUS MEDICAL-A go up and down completely randomly.
Pair Corralation between PULSION Medical and GLOBUS MEDICAL-A
Assuming the 90 days trading horizon PULSION Medical is expected to generate 9.83 times less return on investment than GLOBUS MEDICAL-A. But when comparing it to its historical volatility, PULSION Medical Systems is 1.03 times less risky than GLOBUS MEDICAL-A. It trades about 0.0 of its potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,650 in GLOBUS MEDICAL A on October 11, 2024 and sell it today you would earn a total of 1,900 from holding GLOBUS MEDICAL A or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PULSION Medical Systems vs. GLOBUS MEDICAL A
Performance |
| Timeline |
| PULSION Medical Systems |
| GLOBUS MEDICAL A |
PULSION Medical and GLOBUS MEDICAL-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and GLOBUS MEDICAL-A
The main advantage of trading using opposite PULSION Medical and GLOBUS MEDICAL-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical position performs unexpectedly, GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A will offset losses from the drop in GLOBUS MEDICAL-A's long position.| PULSION Medical vs. PT Bumi Resources | PULSION Medical vs. China Construction Bank | PULSION Medical vs. PT Bank Rakyat | PULSION Medical vs. PT Bank Central |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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