Correlation Between Semirara Mining and Globe Telecom

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

By analyzing existing cross correlation between Semirara Mining Corp and Globe Telecom, you can compare the effects of market volatilities on Semirara Mining and Globe Telecom 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 Semirara Mining with a short position of Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semirara Mining and Globe Telecom.

Diversification Opportunities for Semirara Mining and Globe Telecom

0.83

Correlation Coefficient

Semirara Mining  Globe Telecom

Very poor diversification

The 3 months correlation between Semirara and Globe is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Semirara Mining Corp and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom and Semirara Mining 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 Semirara Mining Corp are associated (or correlated) with Globe Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Telecom has no effect on the direction of Semirara Mining i.e., Semirara Mining and Globe Telecom go up and down completely randomly.

Pair Corralation between Semirara Mining and Globe Telecom

Assuming the 90 days trading horizon Semirara Mining Corp is expected to generate 0.87 times more return on investment than Globe Telecom. However, Semirara Mining Corp is 1.15 times less risky than Globe Telecom. It trades about 0.25 of its potential returns per unit of risk. Globe Telecom is currently generating about 0.12 per unit of risk. If you would invest  3,210  in Semirara Mining Corp on November 29, 2024 and sell it today you would earn a total of  570.00  from holding Semirara Mining Corp or generate 17.76% return on investment over 90 days.

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

Semirara Mining Corp  vs.  Globe Telecom

Semirara Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semirara Mining Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Semirara Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Globe Telecom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globe Telecom are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Globe Telecom may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Semirara Mining and Globe Telecom

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

The idea behind Semirara Mining Corp and Globe Telecom 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.