Correlation Between Global E and Top KingWin

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

Diversification Opportunities for Global E and Top KingWin

-0.78

Correlation Coefficient

Global E  Top KingWin

Pay attention - limited upside

The 3 months correlation between Global and Top is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Top KingWin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Global E i.e., Global E and Top KingWin go up and down completely randomly.

Pair Corralation between Global E and Top KingWin

Given the investment horizon of 90 days Global E Online is expected to generate 0.19 times more return on investment than Top KingWin. However, Global E Online is 5.13 times less risky than Top KingWin. It trades about 0.2 of its potential returns per unit of risk. Top KingWin is currently generating about -0.13 per unit of risk. If you would invest  5,186  in Global E Online on September 28, 2024 and sell it today you would earn a total of  329.00  from holding Global E Online or generate 6.34% return on investment over 90 days.

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

Global E Online  vs.  Top KingWin

Global E Online

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 19 (%) 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.

Top KingWin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Top KingWin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Global E and Top KingWin

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

The idea behind Global E Online and Top KingWin 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.