Correlation Between Global E and Caravelle International

Can any of the company-specific risk be diversified away by investing in both Global E and Caravelle International 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 Global E and Caravelle International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global E Online and Caravelle International Group, you can compare the effects of market volatilities on Global E and Caravelle International 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 Global E with a short position of Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Caravelle International.

Diversification Opportunities for Global E and Caravelle International

0.77

Correlation Coefficient

Global E  Caravelle International

Poor diversification

The 3 months correlation between Global and Caravelle is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International and Global E 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 Global E Online are associated (or correlated) with Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Global E i.e., Global E and Caravelle International go up and down completely randomly.

Pair Corralation between Global E and Caravelle International

Given the investment horizon of 90 days Global E is expected to generate 3.87 times less return on investment than Caravelle International. But when comparing it to its historical volatility, Global E Online is 4.63 times less risky than Caravelle International. It trades about 0.28 of its potential returns per unit of risk. Caravelle International Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  109.00  in Caravelle International Group on October 25, 2024 and sell it today you would earn a total of  266.00  from holding Caravelle International Group or generate 244.04% return on investment over 90 days.

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

Global E Online  vs.  Caravelle International Group

Global E Online

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Caravelle International

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global E and Caravelle International

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

The idea behind Global E Online and Caravelle International Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..