Correlation Between Globe Trade and TOTAL GABON

Can any of the company-specific risk be diversified away by investing in both Globe Trade and TOTAL GABON 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 Globe Trade and TOTAL GABON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globe Trade Centre and TOTAL GABON, you can compare the effects of market volatilities on Globe Trade and TOTAL GABON 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 Globe Trade with a short position of TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and TOTAL GABON.

Diversification Opportunities for Globe Trade and TOTAL GABON

-0.07

Correlation Coefficient

Globe Trade  TOTAL GABON

Good diversification

The 3 months correlation between Globe and TOTAL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON and Globe Trade 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 Globe Trade Centre are associated (or correlated) with TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of Globe Trade i.e., Globe Trade and TOTAL GABON go up and down completely randomly.

Pair Corralation between Globe Trade and TOTAL GABON

If you would invest  15,800  in TOTAL GABON on September 5, 2024 and sell it today you would earn a total of  2,850  from holding TOTAL GABON or generate 18.04% return on investment over 90 days.

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

Globe Trade Centre  vs.  TOTAL GABON

Globe Trade Centre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globe Trade Centre has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Globe Trade is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

TOTAL GABON

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL GABON are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TOTAL GABON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globe Trade and TOTAL GABON

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

The idea behind Globe Trade Centre and TOTAL GABON 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.