Correlation Between Globe Telecom and House Of

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

By analyzing existing cross correlation between Globe Telecom and House of Investments, you can compare the effects of market volatilities on Globe Telecom and House Of 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 House Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and House Of.

Diversification Opportunities for Globe Telecom and House Of

-0.12

Correlation Coefficient

Globe Telecom  House Of

Good diversification

The 3 months correlation between Globe and House is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and House of Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on House of Investments 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 House Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of House of Investments has no effect on the direction of Globe Telecom i.e., Globe Telecom and House Of go up and down completely randomly.

Pair Corralation between Globe Telecom and House Of

Assuming the 90 days trading horizon Globe Telecom is expected to generate 1.14 times more return on investment than House Of. However, Globe Telecom is 1.14 times more volatile than House of Investments. It trades about -0.03 of its potential returns per unit of risk. House of Investments is currently generating about -0.07 per unit of risk. If you would invest  219,597  in Globe Telecom on September 25, 2024 and sell it today you would lose (9,997) from holding Globe Telecom or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	38.1%
Values	Daily Returns

Globe Telecom  vs.  House of Investments

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.

House of Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days House of Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Globe Telecom and House Of

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

The idea behind Globe Telecom and House of Investments 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.