Correlation Between Globavend Holdings and Freightos Limited

Can any of the company-specific risk be diversified away by investing in both Globavend Holdings and Freightos Limited 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 Globavend Holdings and Freightos Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globavend Holdings Limited and Freightos Limited Warrants, you can compare the effects of market volatilities on Globavend Holdings and Freightos Limited 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 Globavend Holdings with a short position of Freightos Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globavend Holdings and Freightos Limited.

Diversification Opportunities for Globavend Holdings and Freightos Limited

-0.37

Correlation Coefficient

Globavend Holdings  Freightos Limited

Very good diversification

The 3 months correlation between Globavend and Freightos is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Globavend Holdings Limited and Freightos Limited Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited and Globavend Holdings 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 Globavend Holdings Limited are associated (or correlated) with Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of Globavend Holdings i.e., Globavend Holdings and Freightos Limited go up and down completely randomly.

Pair Corralation between Globavend Holdings and Freightos Limited

Considering the 90-day investment horizon Globavend Holdings Limited is expected to under-perform the Freightos Limited. But the stock apears to be less risky and, when comparing its historical volatility, Globavend Holdings Limited is 3.87 times less risky than Freightos Limited. The stock trades about -0.09 of its potential returns per unit of risk. The Freightos Limited Warrants is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  8.45  in Freightos Limited Warrants on October 6, 2024 and sell it today you would earn a total of  9.55  from holding Freightos Limited Warrants or generate 113.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.54%
Values	Daily Returns

Globavend Holdings Limited  vs.  Freightos Limited Warrants

Globavend Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globavend Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Globavend Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Freightos Limited

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freightos Limited Warrants are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Freightos Limited showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globavend Holdings and Freightos Limited

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

The idea behind Globavend Holdings Limited and Freightos Limited Warrants 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..