Correlation Between Global Partner and Global Partner

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

Diversification Opportunities for Global Partner and Global Partner

-0.41

Correlation Coefficient

Global Partner  Global Partner

Very good diversification

The 3 months correlation between Global and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Partner Acquisition and Global Partner Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acqui 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acqui has no effect on the direction of Global Partner i.e., Global Partner and Global Partner go up and down completely randomly.

Pair Corralation between Global Partner and Global Partner

Assuming the 90 days horizon Global Partner Acquisition is expected to generate 17.67 times more return on investment than Global Partner. However, Global Partner is 17.67 times more volatile than Global Partner Acquisition. It trades about 0.14 of its potential returns per unit of risk. Global Partner Acquisition is currently generating about -0.07 per unit of risk. If you would invest  4.11  in Global Partner Acquisition on September 8, 2024 and sell it today you would lose (4.11) from holding Global Partner Acquisition or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	59.95%
Values	Daily Returns

Global Partner Acquisition  vs.  Global Partner 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 fairly stable fundamental indicators, Global Partner is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with Global Partner and Global Partner

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

The idea behind Global Partner Acquisition and Global Partner 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.