Correlation Between Globe Trade and Bank Ochrony

Can any of the company-specific risk be diversified away by investing in both Globe Trade and Bank Ochrony 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 Globe Trade and Bank Ochrony into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globe Trade Centre and Bank Ochrony rodowiska, you can compare the effects of market volatilities on Globe Trade and Bank Ochrony 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 Globe Trade with a short position of Bank Ochrony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Bank Ochrony.

Diversification Opportunities for Globe Trade and Bank Ochrony

0.61

Correlation Coefficient

Globe Trade  Bank Ochrony

Poor diversification

The 3 months correlation between Globe and Bank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Bank Ochrony rodowiska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ochrony rodowiska and Globe Trade 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 Globe Trade Centre are associated (or correlated) with Bank Ochrony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ochrony rodowiska has no effect on the direction of Globe Trade i.e., Globe Trade and Bank Ochrony go up and down completely randomly.

Pair Corralation between Globe Trade and Bank Ochrony

Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the Bank Ochrony. But the stock apears to be less risky and, when comparing its historical volatility, Globe Trade Centre is 1.49 times less risky than Bank Ochrony. The stock trades about -0.02 of its potential returns per unit of risk. The Bank Ochrony rodowiska is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  982.00  in Bank Ochrony rodowiska on December 30, 2024 and sell it today you would earn a total of  298.00  from holding Bank Ochrony rodowiska or generate 30.35% return on investment over 90 days.

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

Globe Trade Centre  vs.  Bank Ochrony rodowiska

Globe Trade Centre

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globe Trade Centre has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Globe Trade is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bank Ochrony rodowiska

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Ochrony rodowiska are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bank Ochrony reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globe Trade and Bank Ochrony

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

The idea behind Globe Trade Centre and Bank Ochrony rodowiska 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.