Correlation Between 1StdibsCom and Global E

Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and Global E 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 1StdibsCom and Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1StdibsCom and Global E Online, you can compare the effects of market volatilities on 1StdibsCom and Global E 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 1StdibsCom with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and Global E.

Diversification Opportunities for 1StdibsCom and Global E

-0.1

Correlation Coefficient

1StdibsCom  Global E

Good diversification

The 3 months correlation between 1StdibsCom and Global is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and 1StdibsCom 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 1StdibsCom are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and Global E go up and down completely randomly.

Pair Corralation between 1StdibsCom and Global E

Given the investment horizon of 90 days 1StdibsCom is expected to generate 12.91 times less return on investment than Global E. But when comparing it to its historical volatility, 1StdibsCom is 1.12 times less risky than Global E. It trades about 0.01 of its potential returns per unit of risk. Global E Online is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,815  in Global E Online on November 20, 2024 and sell it today you would earn a total of  3,469  from holding Global E Online or generate 123.23% return on investment over 90 days.

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

1StdibsCom  vs.  Global E Online

1StdibsCom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 1StdibsCom are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, 1StdibsCom may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Global E Online

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 1StdibsCom and Global E

The main advantage of trading using opposite 1StdibsCom and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.

The idea behind 1StdibsCom and Global E Online 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.