Correlation Between Globlex Holding and CHUWIT FARM

Can any of the company-specific risk be diversified away by investing in both Globlex Holding and CHUWIT FARM 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 Globlex Holding and CHUWIT FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globlex Holding Management and CHUWIT FARM PUBLIC, you can compare the effects of market volatilities on Globlex Holding and CHUWIT FARM 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 Globlex Holding with a short position of CHUWIT FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globlex Holding and CHUWIT FARM.

Diversification Opportunities for Globlex Holding and CHUWIT FARM

0.95

Correlation Coefficient

Globlex Holding  CHUWIT FARM

Almost no diversification

The 3 months correlation between Globlex and CHUWIT is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Globlex Holding Management and CHUWIT FARM PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUWIT FARM PUBLIC and Globlex Holding 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 Globlex Holding Management are associated (or correlated) with CHUWIT FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUWIT FARM PUBLIC has no effect on the direction of Globlex Holding i.e., Globlex Holding and CHUWIT FARM go up and down completely randomly.

Pair Corralation between Globlex Holding and CHUWIT FARM

Assuming the 90 days trading horizon Globlex Holding Management is expected to under-perform the CHUWIT FARM. But the stock apears to be less risky and, when comparing its historical volatility, Globlex Holding Management is 1.62 times less risky than CHUWIT FARM. The stock trades about -0.18 of its potential returns per unit of risk. The CHUWIT FARM PUBLIC is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  90.00  in CHUWIT FARM PUBLIC on October 8, 2024 and sell it today you would lose (5.00) from holding CHUWIT FARM PUBLIC or give up 5.56% of portfolio value over 90 days.

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

Globlex Holding Management  vs.  CHUWIT FARM PUBLIC

Globlex Holding Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globlex Holding Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CHUWIT FARM PUBLIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHUWIT FARM PUBLIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Globlex Holding and CHUWIT FARM

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

The idea behind Globlex Holding Management and CHUWIT FARM PUBLIC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.