Correlation Between Globe Trade and PMPG Polskie

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

Diversification Opportunities for Globe Trade and PMPG Polskie

-0.01

Correlation Coefficient

Globe Trade  PMPG Polskie

Good diversification

The 3 months correlation between Globe and PMPG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and PMPG Polskie Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMPG Polskie Media 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 PMPG Polskie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMPG Polskie Media has no effect on the direction of Globe Trade i.e., Globe Trade and PMPG Polskie go up and down completely randomly.

Pair Corralation between Globe Trade and PMPG Polskie

Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the PMPG Polskie. But the stock apears to be less risky and, when comparing its historical volatility, Globe Trade Centre is 1.17 times less risky than PMPG Polskie. The stock trades about -0.07 of its potential returns per unit of risk. The PMPG Polskie Media is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  180.00  in PMPG Polskie Media on November 29, 2024 and sell it today you would lose (11.00) from holding PMPG Polskie Media or give up 6.11% of portfolio value over 90 days.

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

Globe Trade Centre  vs.  PMPG Polskie Media

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

PMPG Polskie Media

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Globe Trade and PMPG Polskie

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

The idea behind Globe Trade Centre and PMPG Polskie Media 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..