Correlation Between Global Dominion and NBI Bearings
Can any of the company-specific risk be diversified away by investing in both Global Dominion and NBI Bearings 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 Global Dominion and NBI Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Dominion Access and NBI Bearings Europe, you can compare the effects of market volatilities on Global Dominion and NBI Bearings 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 Global Dominion with a short position of NBI Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Dominion and NBI Bearings.
Diversification Opportunities for Global Dominion and NBI Bearings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and NBI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global Dominion Access and NBI Bearings Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Bearings Europe and Global Dominion 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 Global Dominion Access are associated (or correlated) with NBI Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Bearings Europe has no effect on the direction of Global Dominion i.e., Global Dominion and NBI Bearings go up and down completely randomly.
Pair Corralation between Global Dominion and NBI Bearings
Assuming the 90 days trading horizon Global Dominion Access is expected to generate 1.38 times more return on investment than NBI Bearings. However, Global Dominion is 1.38 times more volatile than NBI Bearings Europe. It trades about 0.04 of its potential returns per unit of risk. NBI Bearings Europe is currently generating about -0.05 per unit of risk. If you would invest 276.00 in Global Dominion Access on December 3, 2024 and sell it today you would earn a total of 9.00 from holding Global Dominion Access or generate 3.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Global Dominion Access vs. NBI Bearings Europe
Performance |
Timeline |
Global Dominion Access |
NBI Bearings Europe |
Global Dominion and NBI Bearings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Dominion and NBI Bearings
The main advantage of trading using opposite Global Dominion and NBI Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Dominion position performs unexpectedly, NBI Bearings 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 NBI Bearings will offset losses from the drop in NBI Bearings' long position.Global Dominion vs. CIE Automotive SA | Global Dominion vs. Gestamp Automocion SA | Global Dominion vs. Vidrala SA | Global Dominion vs. Miquel y Costas |
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Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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