Correlation Between Globex Mining and Ecotel Communication

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

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

Diversification Opportunities for Globex Mining and Ecotel Communication

0.23

Correlation Coefficient

Globex Mining  Ecotel Communication

Modest diversification

The 3 months correlation between Globex and Ecotel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and ecotel communication ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ecotel communication and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Ecotel Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ecotel communication has no effect on the direction of Globex Mining i.e., Globex Mining and Ecotel Communication go up and down completely randomly.

Pair Corralation between Globex Mining and Ecotel Communication

Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 1.16 times more return on investment than Ecotel Communication. However, Globex Mining is 1.16 times more volatile than ecotel communication ag. It trades about 0.22 of its potential returns per unit of risk. ecotel communication ag is currently generating about -0.02 per unit of risk. If you would invest  73.00  in Globex Mining Enterprises on October 25, 2024 and sell it today you would earn a total of  15.00  from holding Globex Mining Enterprises or generate 20.55% return on investment over 90 days.

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

Globex Mining Enterprises  vs.  ecotel communication ag

Globex Mining Enterprises

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Globex Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

ecotel communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ecotel communication ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Ecotel Communication is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Globex Mining and Ecotel Communication

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

The idea behind Globex Mining Enterprises and ecotel communication ag 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.