Correlation Between Globe Telecom and Axelum Resources

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

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

Diversification Opportunities for Globe Telecom and Axelum Resources

0.65

Correlation Coefficient

Globe Telecom  Axelum Resources

Poor diversification

The 3 months correlation between Globe and Axelum is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp and Globe Telecom 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 Telecom are associated (or correlated) with Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Globe Telecom i.e., Globe Telecom and Axelum Resources go up and down completely randomly.

Pair Corralation between Globe Telecom and Axelum Resources

Assuming the 90 days trading horizon Globe Telecom is expected to under-perform the Axelum Resources. But the stock apears to be less risky and, when comparing its historical volatility, Globe Telecom is 3.8 times less risky than Axelum Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Axelum Resources Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  192.00  in Axelum Resources Corp on September 24, 2024 and sell it today you would earn a total of  16.00  from holding Axelum Resources Corp or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.71%
Values	Daily Returns

Globe Telecom  vs.  Axelum Resources Corp

Globe Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globe Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Globe Telecom is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Axelum Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axelum Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Axelum Resources 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 Telecom and Axelum Resources

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

The idea behind Globe Telecom and Axelum Resources Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.