Correlation Between Global Partner and Corner Growth

Can any of the company-specific risk be diversified away by investing in both Global Partner and Corner Growth 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 Global Partner and Corner Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Partner Acquisition and Corner Growth Acquisition, you can compare the effects of market volatilities on Global Partner and Corner Growth 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 Global Partner with a short position of Corner Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partner and Corner Growth.

Diversification Opportunities for Global Partner and Corner Growth

-0.08

Correlation Coefficient

Global Partner  Corner Growth

Good diversification

The 3 months correlation between Global and Corner is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Partner Acquisition and Corner Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corner Growth Acquisition and Global Partner 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 Global Partner Acquisition are associated (or correlated) with Corner Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corner Growth Acquisition has no effect on the direction of Global Partner i.e., Global Partner and Corner Growth go up and down completely randomly.

Pair Corralation between Global Partner and Corner Growth

Given the investment horizon of 90 days Global Partner Acquisition is expected to under-perform the Corner Growth. But the stock apears to be less risky and, when comparing its historical volatility, Global Partner Acquisition is 1.42 times less risky than Corner Growth. The stock trades about -0.12 of its potential returns per unit of risk. The Corner Growth Acquisition is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Corner Growth Acquisition on September 13, 2024 and sell it today you would earn a total of  15.00  from holding Corner Growth Acquisition or generate 250.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.57%
Values	Daily Returns

Global Partner Acquisition  vs.  Corner Growth Acquisition

Global Partner Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Partner Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Global Partner is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Corner Growth Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corner Growth Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corner Growth is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Global Partner and Corner Growth

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

The idea behind Global Partner Acquisition and Corner Growth 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .