Correlation Between Globavend Holdings and Landstar System

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

Diversification Opportunities for Globavend Holdings and Landstar System

-0.16

Correlation Coefficient

Globavend Holdings  Landstar System

Good diversification

The 3 months correlation between Globavend and Landstar is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Globavend Holdings Limited and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System 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 Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of Globavend Holdings i.e., Globavend Holdings and Landstar System go up and down completely randomly.

Pair Corralation between Globavend Holdings and Landstar System

Considering the 90-day investment horizon Globavend Holdings Limited is expected to generate 3.24 times more return on investment than Landstar System. However, Globavend Holdings is 3.24 times more volatile than Landstar System. It trades about 0.01 of its potential returns per unit of risk. Landstar System is currently generating about 0.01 per unit of risk. If you would invest  71.00  in Globavend Holdings Limited on September 8, 2024 and sell it today you would lose (3.00) from holding Globavend Holdings Limited or give up 4.23% of portfolio value over 90 days.

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

Globavend Holdings Limited  vs.  Landstar System

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Landstar System

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Globavend Holdings and Landstar System

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

The idea behind Globavend Holdings Limited and Landstar System 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 Anywhere module to track or share privately all of your investments from the convenience of any device.