Correlation Between GLOBUS MEDICAL and C PARAN

Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL and C PARAN 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 and C PARAN 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 C PARAN EN, you can compare the effects of market volatilities on GLOBUS MEDICAL and C PARAN 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 with a short position of C PARAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL and C PARAN.

Diversification Opportunities for GLOBUS MEDICAL and C PARAN

-0.79

Correlation Coefficient

GLOBUS MEDICAL  C PARAN

Pay attention - limited upside

The 3 months correlation between GLOBUS and ELP1 is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and C PARAN EN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C PARAN EN and GLOBUS MEDICAL 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 C PARAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C PARAN EN has no effect on the direction of GLOBUS MEDICAL i.e., GLOBUS MEDICAL and C PARAN go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL and C PARAN

Assuming the 90 days trading horizon GLOBUS MEDICAL is expected to generate 1.09 times less return on investment than C PARAN. In addition to that, GLOBUS MEDICAL is 1.04 times more volatile than C PARAN EN. It trades about 0.02 of its total potential returns per unit of risk. C PARAN EN is currently generating about 0.02 per unit of volatility. If you would invest  485.00  in C PARAN EN on September 22, 2024 and sell it today you would earn a total of  75.00  from holding C PARAN EN or generate 15.46% return on investment over 90 days.

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

GLOBUS MEDICAL A  vs.  C PARAN EN

GLOBUS MEDICAL A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, GLOBUS MEDICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

C PARAN EN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C PARAN EN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GLOBUS MEDICAL and C PARAN

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

The idea behind GLOBUS MEDICAL A and C PARAN EN 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.