Correlation Between BANPU POWER and Globlex Holding

Can any of the company-specific risk be diversified away by investing in both BANPU POWER 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 BANPU POWER and Globlex Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANPU POWER and Globlex Holding Management, you can compare the effects of market volatilities on BANPU POWER 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 BANPU POWER with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANPU POWER and Globlex Holding.

Diversification Opportunities for BANPU POWER and Globlex Holding

0.66

Correlation Coefficient

BANPU POWER  Globlex Holding

Poor diversification

The 3 months correlation between BANPU and Globlex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANPU POWER 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 BANPU POWER 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 BANPU POWER 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 BANPU POWER i.e., BANPU POWER and Globlex Holding go up and down completely randomly.

Pair Corralation between BANPU POWER and Globlex Holding

Assuming the 90 days trading horizon BANPU POWER is expected to under-perform the Globlex Holding. In addition to that, BANPU POWER is 2.35 times more volatile than Globlex Holding Management. It trades about -0.26 of its total potential returns per unit of risk. Globlex Holding Management is currently generating about -0.03 per unit of volatility. If you would invest  67.00  in Globlex Holding Management on September 23, 2024 and sell it today you would lose (1.00) from holding Globlex Holding Management or give up 1.49% of portfolio value over 90 days.

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

BANPU POWER  vs.  Globlex Holding Management

BANPU POWER

Risk-Adjusted Performance

0 of 100

Very Weak

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

Globlex Holding Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globlex Holding Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with BANPU POWER and Globlex Holding

The main advantage of trading using opposite BANPU POWER and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANPU POWER 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.

The idea behind BANPU POWER and Globlex Holding Management 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..