Correlation Between Heavitree Brewery and Global Opportunities

Can any of the company-specific risk be diversified away by investing in both Heavitree Brewery and Global Opportunities 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 Heavitree Brewery and Global Opportunities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heavitree Brewery and Global Opportunities Trust, you can compare the effects of market volatilities on Heavitree Brewery and Global Opportunities 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 Heavitree Brewery with a short position of Global Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heavitree Brewery and Global Opportunities.

Diversification Opportunities for Heavitree Brewery and Global Opportunities

-0.38

Correlation Coefficient

Heavitree Brewery  Global Opportunities

Very good diversification

The 3 months correlation between Heavitree and Global is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery and Global Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunities and Heavitree Brewery 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 Heavitree Brewery are associated (or correlated) with Global Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunities has no effect on the direction of Heavitree Brewery i.e., Heavitree Brewery and Global Opportunities go up and down completely randomly.

Pair Corralation between Heavitree Brewery and Global Opportunities

Assuming the 90 days trading horizon Heavitree Brewery is expected to under-perform the Global Opportunities. In addition to that, Heavitree Brewery is 3.08 times more volatile than Global Opportunities Trust. It trades about -0.09 of its total potential returns per unit of risk. Global Opportunities Trust is currently generating about 0.05 per unit of volatility. If you would invest  28,200  in Global Opportunities Trust on December 24, 2024 and sell it today you would earn a total of  1,000.00  from holding Global Opportunities Trust or generate 3.55% return on investment over 90 days.

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

Heavitree Brewery  vs.  Global Opportunities Trust

Heavitree Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heavitree Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Global Opportunities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Opportunities Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Heavitree Brewery and Global Opportunities

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

The idea behind Heavitree Brewery and Global Opportunities Trust 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 CEOs Directory module to screen CEOs from public companies around the world.