Correlation Between GLOBUS MEDICAL-A and Genertec Universal

Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL-A and Genertec Universal 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 MEDICAL-A and Genertec Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GLOBUS MEDICAL A and Genertec Universal Medical, you can compare the effects of market volatilities on GLOBUS MEDICAL-A and Genertec Universal 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 MEDICAL-A with a short position of Genertec Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and Genertec Universal.

Diversification Opportunities for GLOBUS MEDICAL-A and Genertec Universal

0.29

Correlation Coefficient

GLOBUS MEDICAL-A  Genertec Universal

Modest diversification

The 3 months correlation between GLOBUS and Genertec is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal and GLOBUS MEDICAL-A 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 MEDICAL A are associated (or correlated) with Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and Genertec Universal go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL-A and Genertec Universal

Assuming the 90 days trading horizon GLOBUS MEDICAL-A is expected to generate 1.38 times less return on investment than Genertec Universal. But when comparing it to its historical volatility, GLOBUS MEDICAL A is 2.51 times less risky than Genertec Universal. It trades about 0.08 of its potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  56.00  in Genertec Universal Medical on October 9, 2024 and sell it today you would earn a total of  1.00  from holding Genertec Universal Medical or generate 1.79% return on investment over 90 days.

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

GLOBUS MEDICAL A  vs.  Genertec Universal Medical

GLOBUS MEDICAL A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Genertec Universal

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GLOBUS MEDICAL-A and Genertec Universal

The main advantage of trading using opposite GLOBUS MEDICAL-A and Genertec Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL-A position performs unexpectedly, Genertec Universal 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 Genertec Universal will offset losses from the drop in Genertec Universal's long position.

The idea behind GLOBUS MEDICAL A and Genertec Universal Medical 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..