Correlation Between Protek Capital and Global Arena

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

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

Diversification Opportunities for Protek Capital and Global Arena

0.0

Correlation Coefficient

Protek Capital  Global Arena

Pay attention - limited upside

The 3 months correlation between Protek and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Protek Capital and Global Arena Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Arena Holding and Protek Capital 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 Protek Capital are associated (or correlated) with Global Arena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Arena Holding has no effect on the direction of Protek Capital i.e., Protek Capital and Global Arena go up and down completely randomly.

Pair Corralation between Protek Capital and Global Arena

If you would invest (100.00) in Global Arena Holding on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Global Arena Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Protek Capital  vs.  Global Arena Holding

Protek Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Protek Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Protek Capital is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global Arena Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Arena Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Global Arena is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Protek Capital and Global Arena

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

The idea behind Protek Capital and Global Arena Holding 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.