Correlation Between GLOBUS MEDICAL-A and SCHALTBAU HOLDING

Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL-A and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING 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 SCHALTBAU HOLDING, you can compare the effects of market volatilities on GLOBUS MEDICAL-A and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and SCHALTBAU HOLDING.

Diversification Opportunities for GLOBUS MEDICAL-A and SCHALTBAU HOLDING

0.65

Correlation Coefficient

GLOBUS MEDICAL-A  SCHALTBAU HOLDING

Poor diversification

The 3 months correlation between GLOBUS and SCHALTBAU is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and SCHALTBAU HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHALTBAU HOLDING has no effect on the direction of GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and SCHALTBAU HOLDING go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL-A and SCHALTBAU HOLDING

Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 2.51 times more return on investment than SCHALTBAU HOLDING. However, GLOBUS MEDICAL-A is 2.51 times more volatile than SCHALTBAU HOLDING. It trades about 0.22 of its potential returns per unit of risk. SCHALTBAU HOLDING is currently generating about 0.03 per unit of risk. If you would invest  6,350  in GLOBUS MEDICAL A on October 11, 2024 and sell it today you would earn a total of  2,200  from holding GLOBUS MEDICAL A or generate 34.65% return on investment over 90 days.

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

GLOBUS MEDICAL A  vs.  SCHALTBAU HOLDING

GLOBUS MEDICAL A

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 16 (%) 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.

SCHALTBAU HOLDING

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SCHALTBAU HOLDING is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GLOBUS MEDICAL-A and SCHALTBAU HOLDING

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

The idea behind GLOBUS MEDICAL A and SCHALTBAU HOLDING 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..