Correlation Between BANK CENTRAL and Globex Mining

Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and Globex Mining 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 BANK CENTRAL and Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK CENTRAL ASIA and Globex Mining Enterprises, you can compare the effects of market volatilities on BANK CENTRAL and Globex Mining 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 BANK CENTRAL with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and Globex Mining.

Diversification Opportunities for BANK CENTRAL and Globex Mining

-0.39

Correlation Coefficient

BANK CENTRAL  Globex Mining

Very good diversification

The 3 months correlation between BANK and Globex is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and Globex Mining go up and down completely randomly.

Pair Corralation between BANK CENTRAL and Globex Mining

Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to under-perform the Globex Mining. In addition to that, BANK CENTRAL is 1.84 times more volatile than Globex Mining Enterprises. It trades about -0.09 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.31 per unit of volatility. If you would invest  69.00  in Globex Mining Enterprises on October 6, 2024 and sell it today you would earn a total of  10.00  from holding Globex Mining Enterprises or generate 14.49% return on investment over 90 days.

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

BANK CENTRAL ASIA  vs.  Globex Mining Enterprises

BANK CENTRAL ASIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK CENTRAL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Globex Mining Enterprises

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Globex Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK CENTRAL and Globex Mining

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

The idea behind BANK CENTRAL ASIA and Globex Mining Enterprises 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.