Correlation Between Globlex Holding and Country Group

Can any of the company-specific risk be diversified away by investing in both Globlex Holding and Country Group 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 Country Group 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 Country Group Holdings, you can compare the effects of market volatilities on Globlex Holding and Country Group 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 Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globlex Holding and Country Group.

Diversification Opportunities for Globlex Holding and Country Group

0.96

Correlation Coefficient

Globlex Holding  Country Group

Almost no diversification

The 3 months correlation between Globlex and Country is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Globlex Holding Management and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings 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 Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of Globlex Holding i.e., Globlex Holding and Country Group go up and down completely randomly.

Pair Corralation between Globlex Holding and Country Group

Assuming the 90 days trading horizon Globlex Holding Management is expected to under-perform the Country Group. In addition to that, Globlex Holding is 1.47 times more volatile than Country Group Holdings. It trades about -0.16 of its total potential returns per unit of risk. Country Group Holdings is currently generating about -0.11 per unit of volatility. If you would invest  69.00  in Country Group Holdings on August 30, 2024 and sell it today you would lose (2.00) from holding Country Group Holdings or give up 2.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.65%
Values	Daily Returns

Globlex Holding Management  vs.  Country Group Holdings

Globlex Holding Mana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globlex Holding Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Globlex Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Country Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Country Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Country Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globlex Holding and Country Group

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

The idea behind Globlex Holding Management and Country Group Holdings 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.