Correlation Between Trxade and Global Partners

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

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

Diversification Opportunities for Trxade and Global Partners

-0.74

Correlation Coefficient

Trxade  Global Partners

Pay attention - limited upside

The 3 months correlation between Trxade and Global is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP and Trxade 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 Trxade Group are associated (or correlated) with Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Trxade i.e., Trxade and Global Partners go up and down completely randomly.

Pair Corralation between Trxade and Global Partners

Given the investment horizon of 90 days Trxade Group is expected to generate 30.26 times more return on investment than Global Partners. However, Trxade is 30.26 times more volatile than Global Partners LP. It trades about 0.07 of its potential returns per unit of risk. Global Partners LP is currently generating about 0.11 per unit of risk. If you would invest  275.00  in Trxade Group on October 4, 2024 and sell it today you would earn a total of  471.00  from holding Trxade Group or generate 171.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.87%
Values	Daily Returns

Trxade Group  vs.  Global Partners LP

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Trxade is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Global Partners LP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Partners LP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Global Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Trxade and Global Partners

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

The idea behind Trxade Group and Global Partners LP 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.