Correlation Between BigBearai Holdings and Globant SA

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Globant SA 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 BigBearai Holdings and Globant SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and Globant SA, you can compare the effects of market volatilities on BigBearai Holdings and Globant SA 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 BigBearai Holdings with a short position of Globant SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Globant SA.

Diversification Opportunities for BigBearai Holdings and Globant SA

0.4

Correlation Coefficient

BigBearai Holdings  Globant SA

Very weak diversification

The 3 months correlation between BigBearai and Globant is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Globant SA go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Globant SA

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 2.66 times more return on investment than Globant SA. However, BigBearai Holdings is 2.66 times more volatile than Globant SA. It trades about -0.02 of its potential returns per unit of risk. Globant SA is currently generating about -0.21 per unit of risk. If you would invest  481.00  in BigBearai Holdings on December 30, 2024 and sell it today you would lose (177.00) from holding BigBearai Holdings or give up 36.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BigBearai Holdings  vs.  Globant SA

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Globant SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globant SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BigBearai Holdings and Globant SA

The main advantage of trading using opposite BigBearai Holdings and Globant SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Globant SA 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 Globant SA will offset losses from the drop in Globant SA's long position.

The idea behind BigBearai Holdings and Globant SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.