Correlation Between RB Food and Globlex Holding
Can any of the company-specific risk be diversified away by investing in both RB Food and Globlex Holding 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 RB Food and Globlex Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB Food Supply and Globlex Holding Management, you can compare the effects of market volatilities on RB Food and Globlex Holding 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 RB Food with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB Food and Globlex Holding.
Diversification Opportunities for RB Food and Globlex Holding
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RBF and Globlex is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding RB Food Supply and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana and RB Food 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 RB Food Supply are associated (or correlated) with Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of RB Food i.e., RB Food and Globlex Holding go up and down completely randomly.
Pair Corralation between RB Food and Globlex Holding
Assuming the 90 days trading horizon RB Food Supply is expected to generate 1.66 times more return on investment than Globlex Holding. However, RB Food is 1.66 times more volatile than Globlex Holding Management. It trades about 0.29 of its potential returns per unit of risk. Globlex Holding Management is currently generating about -0.27 per unit of risk. If you would invest 555.00 in RB Food Supply on September 4, 2024 and sell it today you would earn a total of 115.00 from holding RB Food Supply or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RB Food Supply vs. Globlex Holding Management
Performance |
| Timeline |
| RB Food Supply |
| Globlex Holding Mana |
RB Food and Globlex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RB Food and Globlex Holding
The main advantage of trading using opposite RB Food and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB Food position performs unexpectedly, Globlex Holding 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 Globlex Holding will offset losses from the drop in Globlex Holding's long position.| RB Food vs. Kingsmen CMTI Public | RB Food vs. Hydrotek Public | RB Food vs. Karmarts Public | RB Food vs. KC Metalsheet Public |
| Globlex Holding vs. Thai Steel Cable | Globlex Holding vs. Tropical Canning Public | Globlex Holding vs. RB Food Supply | Globlex Holding vs. Eureka Design Public |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |