Correlation Between 51Talk Online and Global Star

Can any of the company-specific risk be diversified away by investing in both 51Talk Online and Global Star 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 51Talk Online and Global Star into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 51Talk Online Education and Global Star Acquisition, you can compare the effects of market volatilities on 51Talk Online and Global Star 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 51Talk Online with a short position of Global Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of 51Talk Online and Global Star.

Diversification Opportunities for 51Talk Online and Global Star

0.35

Correlation Coefficient

51Talk Online  Global Star

Weak diversification

The 3 months correlation between 51Talk and Global is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding 51Talk Online Education and Global Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition and 51Talk Online 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 51Talk Online Education are associated (or correlated) with Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition has no effect on the direction of 51Talk Online i.e., 51Talk Online and Global Star go up and down completely randomly.

Pair Corralation between 51Talk Online and Global Star

Considering the 90-day investment horizon 51Talk Online Education is expected to generate 10.21 times more return on investment than Global Star. However, 51Talk Online is 10.21 times more volatile than Global Star Acquisition. It trades about 0.0 of its potential returns per unit of risk. Global Star Acquisition is currently generating about -0.02 per unit of risk. If you would invest  1,436  in 51Talk Online Education on September 4, 2024 and sell it today you would lose (65.00) from holding 51Talk Online Education or give up 4.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

51Talk Online Education  vs.  Global Star Acquisition

51Talk Online Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 51Talk Online Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 51Talk Online is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Star Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Star Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global Star is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 51Talk Online and Global Star

The main advantage of trading using opposite 51Talk Online and Global Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 51Talk Online position performs unexpectedly, Global Star 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 Star will offset losses from the drop in Global Star's long position.

The idea behind 51Talk Online Education and Global Star Acquisition 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.