Correlation Between Globalink Investment and NorthView Acquisition

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

By analyzing existing cross correlation between Globalink Investment Warrants and NorthView Acquisition, you can compare the effects of market volatilities on Globalink Investment and NorthView Acquisition 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 NorthView Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalink Investment and NorthView Acquisition.

Diversification Opportunities for Globalink Investment and NorthView Acquisition

-0.18

Correlation Coefficient

Globalink Investment  NorthView Acquisition

Good diversification

The 3 months correlation between Globalink and NorthView is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Globalink Investment Warrants and NorthView Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthView Acquisition 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 Warrants are associated (or correlated) with NorthView Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthView Acquisition has no effect on the direction of Globalink Investment i.e., Globalink Investment and NorthView Acquisition go up and down completely randomly.

Pair Corralation between Globalink Investment and NorthView Acquisition

Assuming the 90 days horizon Globalink Investment Warrants is expected to generate 0.99 times more return on investment than NorthView Acquisition. However, Globalink Investment Warrants is 1.01 times less risky than NorthView Acquisition. It trades about 0.27 of its potential returns per unit of risk. NorthView Acquisition is currently generating about 0.25 per unit of risk. If you would invest  2.00  in Globalink Investment Warrants on October 11, 2024 and sell it today you would lose (1.67) from holding Globalink Investment Warrants or give up 83.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.77%
Values	Daily Returns

Globalink Investment Warrants  vs.  NorthView Acquisition

Globalink Investment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Globalink Investment Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal forward indicators, Globalink Investment showed solid returns over the last few months and may actually be approaching a breakup point.

NorthView Acquisition

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days NorthView Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak fundamental indicators, NorthView Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globalink Investment and NorthView Acquisition

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

The idea behind Globalink Investment Warrants and NorthView Acquisition 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.