Correlation Between Globus Medical, and Western Union

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

By analyzing existing cross correlation between Globus Medical, and The Western Union, you can compare the effects of market volatilities on Globus Medical, and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical, and Western Union.

Diversification Opportunities for Globus Medical, and Western Union

0.1

Correlation Coefficient

Globus Medical,  Western Union

Average diversification

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

Pair Corralation between Globus Medical, and Western Union

Assuming the 90 days trading horizon Globus Medical, is expected to generate 1.14 times more return on investment than Western Union. However, Globus Medical, is 1.14 times more volatile than The Western Union. It trades about 0.23 of its potential returns per unit of risk. The Western Union is currently generating about 0.03 per unit of risk. If you would invest  4,920  in Globus Medical, on October 8, 2024 and sell it today you would earn a total of  1,336  from holding Globus Medical, or generate 27.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

Globus Medical,  vs.  The Western Union

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 weak primary indicators, Globus Medical, sustained solid returns over the last few months and may actually be approaching a breakup point.

Western Union

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Western Union are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Western Union is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Globus Medical, and Western Union

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

The idea behind Globus Medical, and The Western Union 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.