Correlation Between Quorum Information and Globex Mining

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

By analyzing existing cross correlation between Quorum Information Technologies and Globex Mining Enterprises, you can compare the effects of market volatilities on Quorum Information and Globex Mining 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 Quorum Information with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quorum Information and Globex Mining.

Diversification Opportunities for Quorum Information and Globex Mining

-0.41

Correlation Coefficient

Quorum Information  Globex Mining

Very good diversification

The 3 months correlation between Quorum and Globex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Quorum Information Technologie and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and Quorum Information 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 Quorum Information Technologies are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Quorum Information i.e., Quorum Information and Globex Mining go up and down completely randomly.

Pair Corralation between Quorum Information and Globex Mining

Assuming the 90 days horizon Quorum Information is expected to generate 6.59 times less return on investment than Globex Mining. In addition to that, Quorum Information is 1.16 times more volatile than Globex Mining Enterprises. It trades about 0.03 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.2 per unit of volatility. If you would invest  83.00  in Globex Mining Enterprises on September 3, 2024 and sell it today you would earn a total of  28.00  from holding Globex Mining Enterprises or generate 33.73% return on investment over 90 days.

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

Quorum Information Technologie  vs.  Globex Mining Enterprises

Quorum Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quorum Information Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Quorum Information is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Globex Mining Enterprises

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Globex Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quorum Information and Globex Mining

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

The idea behind Quorum Information Technologies and Globex Mining Enterprises 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.