Correlation Between Globus Maritime and Caravelle International

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

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

Diversification Opportunities for Globus Maritime and Caravelle International

-0.91

Correlation Coefficient

Globus Maritime  Caravelle International

Pay attention - limited upside

The 3 months correlation between Globus and Caravelle is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International and Globus Maritime 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 Globus Maritime 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 Globus Maritime i.e., Globus Maritime and Caravelle International go up and down completely randomly.

Pair Corralation between Globus Maritime and Caravelle International

Given the investment horizon of 90 days Globus Maritime is expected to under-perform the Caravelle International. But the stock apears to be less risky and, when comparing its historical volatility, Globus Maritime is 2.9 times less risky than Caravelle International. The stock trades about -0.23 of its potential returns per unit of risk. The Caravelle International Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Caravelle International Group on September 27, 2024 and sell it today you would earn a total of  123.00  from holding Caravelle International Group or generate 94.62% return on investment over 90 days.

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

Globus Maritime  vs.  Caravelle International Group

Globus Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Caravelle International

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 22 (%) 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 Globus Maritime and Caravelle International

The main advantage of trading using opposite Globus Maritime and Caravelle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Maritime 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 Globus Maritime 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.

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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.