Correlation Between Hub and Globavend Holdings

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

By analyzing existing cross correlation between Hub Group and Globavend Holdings Limited, you can compare the effects of market volatilities on Hub and Globavend Holdings 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 Hub with a short position of Globavend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub and Globavend Holdings.

Diversification Opportunities for Hub and Globavend Holdings

-0.41

Correlation Coefficient

Hub  Globavend Holdings

Very good diversification

The 3 months correlation between Hub and Globavend is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hub Group and Globavend Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globavend Holdings and Hub 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 Hub Group are associated (or correlated) with Globavend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globavend Holdings has no effect on the direction of Hub i.e., Hub and Globavend Holdings go up and down completely randomly.

Pair Corralation between Hub and Globavend Holdings

Given the investment horizon of 90 days Hub Group is expected to generate 0.36 times more return on investment than Globavend Holdings. However, Hub Group is 2.75 times less risky than Globavend Holdings. It trades about 0.11 of its potential returns per unit of risk. Globavend Holdings Limited is currently generating about 0.03 per unit of risk. If you would invest  4,578  in Hub Group on September 3, 2024 and sell it today you would earn a total of  586.00  from holding Hub Group or generate 12.8% return on investment over 90 days.

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

Hub Group  vs.  Globavend Holdings Limited

Hub Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, Hub reported solid returns over the last few months and may actually be approaching a breakup point.

Globavend Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globavend Holdings Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Globavend Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hub and Globavend Holdings

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

The idea behind Hub Group and Globavend Holdings Limited 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.