Correlation Between Globe Metals and Pengana Private

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

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

Diversification Opportunities for Globe Metals and Pengana Private

-0.34

Correlation Coefficient

Globe Metals  Pengana Private

Very good diversification

The 3 months correlation between Globe and Pengana is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining and Pengana Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengana Private Equity and Globe Metals 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 Globe Metals Mining are associated (or correlated) with Pengana Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengana Private Equity has no effect on the direction of Globe Metals i.e., Globe Metals and Pengana Private go up and down completely randomly.

Pair Corralation between Globe Metals and Pengana Private

Assuming the 90 days trading horizon Globe Metals Mining is expected to under-perform the Pengana Private. In addition to that, Globe Metals is 1.37 times more volatile than Pengana Private Equity. It trades about -0.19 of its total potential returns per unit of risk. Pengana Private Equity is currently generating about 0.17 per unit of volatility. If you would invest  114.00  in Pengana Private Equity on September 24, 2024 and sell it today you would earn a total of  10.00  from holding Pengana Private Equity or generate 8.77% return on investment over 90 days.

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

Globe Metals Mining  vs.  Pengana Private Equity

Globe Metals Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globe Metals Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Globe Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pengana Private Equity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pengana Private Equity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pengana Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Globe Metals and Pengana Private

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

The idea behind Globe Metals Mining and Pengana Private Equity 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.