Correlation Between Karmarts Public and Globlex Holding

Can any of the company-specific risk be diversified away by investing in both Karmarts Public and Globlex Holding 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 Karmarts Public and Globlex Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Karmarts Public and Globlex Holding Management, you can compare the effects of market volatilities on Karmarts Public and Globlex Holding 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 Karmarts Public with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karmarts Public and Globlex Holding.

Diversification Opportunities for Karmarts Public and Globlex Holding

-0.05

Correlation Coefficient

Karmarts Public  Globlex Holding

Good diversification

The 3 months correlation between Karmarts and Globlex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Karmarts Public and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana and Karmarts Public 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 Karmarts Public are associated (or correlated) with Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of Karmarts Public i.e., Karmarts Public and Globlex Holding go up and down completely randomly.

Pair Corralation between Karmarts Public and Globlex Holding

Assuming the 90 days trading horizon Karmarts Public is expected to under-perform the Globlex Holding. But the stock apears to be less risky and, when comparing its historical volatility, Karmarts Public is 44.82 times less risky than Globlex Holding. The stock trades about -0.06 of its potential returns per unit of risk. The Globlex Holding Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Globlex Holding Management on August 30, 2024 and sell it today you would earn a total of  3.00  from holding Globlex Holding Management or generate 4.55% return on investment over 90 days.

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

Karmarts Public  vs.  Globlex Holding Management

Karmarts Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karmarts Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Globlex Holding Mana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globlex Holding Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Globlex Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Karmarts Public and Globlex Holding

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

The idea behind Karmarts Public and Globlex Holding Management 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 CEOs Directory module to screen CEOs from public companies around the world.