Correlation Between GLOBAL and BBB Foods
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By analyzing existing cross correlation between GLOBAL PAYMENTS INC and BBB Foods, you can compare the effects of market volatilities on GLOBAL and BBB Foods 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 GLOBAL with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBAL and BBB Foods.
Diversification Opportunities for GLOBAL and BBB Foods
Good diversification
The 3 months correlation between GLOBAL and BBB is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GLOBAL PAYMENTS INC and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and GLOBAL 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 GLOBAL PAYMENTS INC are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of GLOBAL i.e., GLOBAL and BBB Foods go up and down completely randomly.
Pair Corralation between GLOBAL and BBB Foods
Assuming the 90 days trading horizon GLOBAL is expected to generate 35.13 times less return on investment than BBB Foods. But when comparing it to its historical volatility, GLOBAL PAYMENTS INC is 6.06 times less risky than BBB Foods. It trades about 0.02 of its potential returns per unit of risk. BBB Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,750 in BBB Foods on September 3, 2024 and sell it today you would earn a total of 1,034 from holding BBB Foods or generate 59.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 67.32% |
| Values | Daily Returns |
GLOBAL PAYMENTS INC vs. BBB Foods
Performance |
| Timeline |
| GLOBAL PAYMENTS INC |
| BBB Foods |
GLOBAL and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBAL and BBB Foods
The main advantage of trading using opposite GLOBAL and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBAL position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| GLOBAL vs. Ainsworth Game Technology | GLOBAL vs. Yum Brands | GLOBAL vs. The Wendys Co | GLOBAL vs. Sweetgreen |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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