Correlation Between Globus Medical, and Brio Real

Can any of the company-specific risk be diversified away by investing in both Globus Medical, and Brio Real 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 Globus Medical, and Brio Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globus Medical, and Brio Real Estate, you can compare the effects of market volatilities on Globus Medical, and Brio Real 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 Globus Medical, with a short position of Brio Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical, and Brio Real.

Diversification Opportunities for Globus Medical, and Brio Real

0.23

Correlation Coefficient

Globus Medical,  Brio Real

Modest diversification

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

Pair Corralation between Globus Medical, and Brio Real

Assuming the 90 days trading horizon Globus Medical, is expected to generate 18.04 times less return on investment than Brio Real. But when comparing it to its historical volatility, Globus Medical, is 1.76 times less risky than Brio Real. It trades about 0.02 of its potential returns per unit of risk. Brio Real Estate is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  86,743  in Brio Real Estate on October 6, 2024 and sell it today you would earn a total of  8,042  from holding Brio Real Estate or generate 9.27% return on investment over 90 days.

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

Globus Medical,  vs.  Brio Real Estate

Globus Medical,

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Medical, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Globus Medical, sustained solid returns over the last few months and may actually be approaching a breakup point.

Brio Real Estate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brio Real Estate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak forward indicators, Brio Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Medical, and Brio Real

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

The idea behind Globus Medical, and Brio Real Estate 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.