Correlation Between Bank Handlowy and Globe Trade

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

By analyzing existing cross correlation between Bank Handlowy w and Globe Trade Centre, you can compare the effects of market volatilities on Bank Handlowy and Globe Trade 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 Bank Handlowy with a short position of Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Handlowy and Globe Trade.

Diversification Opportunities for Bank Handlowy and Globe Trade

-0.07

Correlation Coefficient

Bank Handlowy  Globe Trade

Good diversification

The 3 months correlation between Bank and Globe is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bank Handlowy w and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre and Bank Handlowy 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 Bank Handlowy w are associated (or correlated) with Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Bank Handlowy i.e., Bank Handlowy and Globe Trade go up and down completely randomly.

Pair Corralation between Bank Handlowy and Globe Trade

Assuming the 90 days trading horizon Bank Handlowy w is expected to generate 0.59 times more return on investment than Globe Trade. However, Bank Handlowy w is 1.69 times less risky than Globe Trade. It trades about 0.13 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.28 per unit of risk. If you would invest  8,660  in Bank Handlowy w on September 29, 2024 and sell it today you would earn a total of  240.00  from holding Bank Handlowy w or generate 2.77% return on investment over 90 days.

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

Bank Handlowy w  vs.  Globe Trade Centre

Bank Handlowy w

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Handlowy w has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Bank Handlowy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Globe Trade Centre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globe Trade Centre has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Bank Handlowy and Globe Trade

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

The idea behind Bank Handlowy w and Globe Trade Centre 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.