Correlation Between Globalink Investment and Viemed Healthcare

Can any of the company-specific risk be diversified away by investing in both Globalink Investment and Viemed Healthcare 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 Globalink Investment and Viemed Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globalink Investment Unit and Viemed Healthcare, you can compare the effects of market volatilities on Globalink Investment and Viemed Healthcare 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 Globalink Investment with a short position of Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalink Investment and Viemed Healthcare.

Diversification Opportunities for Globalink Investment and Viemed Healthcare

0.14

Correlation Coefficient

Globalink Investment  Viemed Healthcare

Average diversification

The 3 months correlation between Globalink and Viemed is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Globalink Investment Unit and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and Globalink Investment 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 Globalink Investment Unit are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Globalink Investment i.e., Globalink Investment and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Globalink Investment and Viemed Healthcare

Assuming the 90 days horizon Globalink Investment Unit is expected to generate 0.95 times more return on investment than Viemed Healthcare. However, Globalink Investment Unit is 1.05 times less risky than Viemed Healthcare. It trades about 0.01 of its potential returns per unit of risk. Viemed Healthcare is currently generating about 0.01 per unit of risk. If you would invest  1,027  in Globalink Investment Unit on October 22, 2024 and sell it today you would earn a total of  5.00  from holding Globalink Investment Unit or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.18%
Values	Daily Returns

Globalink Investment Unit  vs.  Viemed Healthcare

Globalink Investment Unit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globalink Investment Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Globalink Investment and Viemed Healthcare

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

The idea behind Globalink Investment Unit and Viemed Healthcare 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.