Correlation Between Global Telecom and Iron

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

By analyzing existing cross correlation between Global Telecom Holding and Iron And Steel, you can compare the effects of market volatilities on Global Telecom and Iron 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 Global Telecom with a short position of Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Telecom and Iron.

Diversification Opportunities for Global Telecom and Iron

0.0

Correlation Coefficient

Global Telecom  Iron

Pay attention - limited upside

The 3 months correlation between Global and Iron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Telecom Holding and Iron And Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron And Steel and Global 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 Global Telecom Holding are associated (or correlated) with Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron And Steel has no effect on the direction of Global Telecom i.e., Global Telecom and Iron go up and down completely randomly.

Pair Corralation between Global Telecom and Iron

If you would invest  490.00  in Global Telecom Holding on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Global Telecom Holding or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Global Telecom Holding  vs.  Iron And Steel

Global Telecom Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Telecom Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Global Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Iron And Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron And Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Global Telecom and Iron

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

The idea behind Global Telecom Holding and Iron And Steel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.