Correlation Between Target and Globus Medical,

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

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

Diversification Opportunities for Target and Globus Medical,

0.74

Correlation Coefficient

Target  Globus Medical,

Poor diversification

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

Pair Corralation between Target and Globus Medical,

Assuming the 90 days trading horizon Target is expected to under-perform the Globus Medical,. But the stock apears to be less risky and, when comparing its historical volatility, Target is 1.06 times less risky than Globus Medical,. The stock trades about -0.26 of its potential returns per unit of risk. The Globus Medical, is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  6,510  in Globus Medical, on December 26, 2024 and sell it today you would lose (1,090) from holding Globus Medical, or give up 16.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Target  vs.  Globus Medical,

Target

Risk-Adjusted Performance

Very Weak

Over the last 90 days Target has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Globus Medical,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globus Medical, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Target and Globus Medical,

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

The idea behind Target and Globus Medical, 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.