Correlation Between Skyline Investment and Globe Trade
Can any of the company-specific risk be diversified away by investing in both Skyline Investment 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 Skyline Investment and Globe Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skyline Investment SA and Globe Trade Centre, you can compare the effects of market volatilities on Skyline Investment 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 Skyline Investment with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skyline Investment and Globe Trade.
Diversification Opportunities for Skyline Investment and Globe Trade
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skyline and Globe is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Skyline Investment SA 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 Skyline Investment 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 Skyline Investment SA 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 Skyline Investment i.e., Skyline Investment and Globe Trade go up and down completely randomly.
Pair Corralation between Skyline Investment and Globe Trade
Assuming the 90 days trading horizon Skyline Investment SA is expected to under-perform the Globe Trade. But the stock apears to be less risky and, when comparing its historical volatility, Skyline Investment SA is 1.16 times less risky than Globe Trade. The stock trades about -0.08 of its potential returns per unit of risk. The Globe Trade Centre is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 436.00 in Globe Trade Centre on August 24, 2024 and sell it today you would earn a total of 9.00 from holding Globe Trade Centre or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skyline Investment SA vs. Globe Trade Centre
Performance |
| Timeline |
| Skyline Investment |
| Globe Trade Centre |
Skyline Investment and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skyline Investment and Globe Trade
The main advantage of trading using opposite Skyline Investment and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skyline Investment 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.| Skyline Investment vs. PLAYWAY SA | Skyline Investment vs. Play2Chill SA | Skyline Investment vs. Movie Games SA | Skyline Investment vs. Intersport Polska SA |
| Globe Trade vs. Quantum Software SA | Globe Trade vs. MCI Management SA | Globe Trade vs. Bank Millennium SA | Globe Trade vs. Santander Bank Polska |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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