Correlation Between Sports Entertainment and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Sports Entertainment and Globe Metals 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 Sports Entertainment and Globe Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Entertainment Group and Globe Metals Mining, you can compare the effects of market volatilities on Sports Entertainment and Globe Metals 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 Sports Entertainment with a short position of Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Entertainment and Globe Metals.
Diversification Opportunities for Sports Entertainment and Globe Metals
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sports and Globe is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sports Entertainment Group and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining and Sports Entertainment 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 Sports Entertainment Group are associated (or correlated) with Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Sports Entertainment i.e., Sports Entertainment and Globe Metals go up and down completely randomly.
Pair Corralation between Sports Entertainment and Globe Metals
Assuming the 90 days trading horizon Sports Entertainment Group is expected to generate 0.82 times more return on investment than Globe Metals. However, Sports Entertainment Group is 1.22 times less risky than Globe Metals. It trades about 0.02 of its potential returns per unit of risk. Globe Metals Mining is currently generating about 0.01 per unit of risk. If you would invest 23.00 in Sports Entertainment Group on October 14, 2024 and sell it today you would lose (1.00) from holding Sports Entertainment Group or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Entertainment Group vs. Globe Metals Mining
Performance |
| Timeline |
| Sports Entertainment |
| Globe Metals Mining |
Sports Entertainment and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Entertainment and Globe Metals
The main advantage of trading using opposite Sports Entertainment and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Entertainment position performs unexpectedly, Globe Metals 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 Metals will offset losses from the drop in Globe Metals' long position.| Sports Entertainment vs. Duketon Mining | Sports Entertainment vs. Retail Food Group | Sports Entertainment vs. DMC Mining | Sports Entertainment vs. Globe Metals Mining |
| Globe Metals vs. Skycity Entertainment Group | Globe Metals vs. COAST ENTERTAINMENT HOLDINGS | Globe Metals vs. Sports Entertainment Group | Globe Metals vs. Nine Entertainment Co |
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.
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