Correlation Between Globus Maritime and Global Partners

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

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

Diversification Opportunities for Globus Maritime and Global Partners

-0.63

Correlation Coefficient

Globus Maritime  Global Partners

Excellent diversification

The 3 months correlation between Globus and Global is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP and Globus Maritime 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 Globus Maritime are associated (or correlated) with Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Globus Maritime i.e., Globus Maritime and Global Partners go up and down completely randomly.

Pair Corralation between Globus Maritime and Global Partners

Given the investment horizon of 90 days Globus Maritime is expected to generate 1.74 times less return on investment than Global Partners. In addition to that, Globus Maritime is 1.72 times more volatile than Global Partners LP. It trades about 0.02 of its total potential returns per unit of risk. Global Partners LP is currently generating about 0.07 per unit of volatility. If you would invest  2,636  in Global Partners LP on September 26, 2024 and sell it today you would earn a total of  2,152  from holding Global Partners LP or generate 81.64% return on investment over 90 days.

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

Globus Maritime  vs.  Global Partners LP

Globus Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Global Partners LP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Partners LP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Global Partners may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Globus Maritime and Global Partners

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

The idea behind Globus Maritime and Global Partners LP 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.