Correlation Between Global Health and Galileo Mining

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

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

Diversification Opportunities for Global Health and Galileo Mining

0.32

Correlation Coefficient

Global Health  Galileo Mining

Weak diversification

The 3 months correlation between Global and Galileo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Galileo Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galileo Mining and Global Health 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 Health are associated (or correlated) with Galileo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galileo Mining has no effect on the direction of Global Health i.e., Global Health and Galileo Mining go up and down completely randomly.

Pair Corralation between Global Health and Galileo Mining

If you would invest  11.00  in Galileo Mining on October 8, 2024 and sell it today you would earn a total of  4.00  from holding Galileo Mining or generate 36.36% return on investment over 90 days.

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

Global Health  vs.  Galileo Mining

Global Health

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Global Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Galileo Mining

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Galileo Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Galileo Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Global Health and Galileo Mining

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

The idea behind Global Health and Galileo Mining 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.