Correlation Between CK Power and Globlex Holding

Can any of the company-specific risk be diversified away by investing in both CK 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 CK 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 CK Power Public and Globlex Holding Management, you can compare the effects of market volatilities on CK 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 CK Power with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Globlex Holding.

Diversification Opportunities for CK Power and Globlex Holding

0.85

Correlation Coefficient

CK Power  Globlex Holding

Very poor diversification

The 3 months correlation between CKP and Globlex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public 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 CK 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 CK Power Public 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 CK Power i.e., CK Power and Globlex Holding go up and down completely randomly.

Pair Corralation between CK Power and Globlex Holding

Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Globlex Holding. In addition to that, CK Power is 1.35 times more volatile than Globlex Holding Management. It trades about -0.16 of its total potential returns per unit of risk. Globlex Holding Management is currently generating about -0.19 per unit of volatility. If you would invest  70.00  in Globlex Holding Management on November 28, 2024 and sell it today you would lose (12.00) from holding Globlex Holding Management or give up 17.14% of portfolio value over 90 days.

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

CK Power Public  vs.  Globlex Holding Management

CK Power Public

Risk-Adjusted Performance

Very Weak

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

Globlex Holding Mana

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CK Power and Globlex Holding

The main advantage of trading using opposite CK Power and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK 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 CK Power Public 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.