Correlation Between Global Advantage and Global E

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Global Advantage and Global E 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 Advantage and Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Advantage Portfolio and Global E Portfolio, you can compare the effects of market volatilities on Global Advantage and Global E 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 Advantage with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Advantage and Global E.

Diversification Opportunities for Global Advantage and Global E

GlobalGlobalDiversified AwayGlobalGlobalDiversified Away100%
0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Global and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Global Advantage Portfolio and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio and Global Advantage 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 Advantage Portfolio are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of Global Advantage i.e., Global Advantage and Global E go up and down completely randomly.

Pair Corralation between Global Advantage and Global E

Assuming the 90 days horizon Global Advantage Portfolio is expected to generate 2.2 times more return on investment than Global E. However, Global Advantage is 2.2 times more volatile than Global E Portfolio. It trades about 0.36 of its potential returns per unit of risk. Global E Portfolio is currently generating about 0.16 per unit of risk. If you would invest  1,325  in Global Advantage Portfolio on September 15, 2024 and sell it today you would earn a total of  548.00  from holding Global Advantage Portfolio or generate 41.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Global Advantage Portfolio  vs.  Global E Portfolio

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 10203040
JavaScript chart by amCharts 3.21.15MIGIX MLMCX
       Timeline  
Global Advantage Por 

Risk-Adjusted Performance

28 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global Advantage Portfolio are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Global Advantage showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec141516171819
Global E Portfolio 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Global E Portfolio are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Global E may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec19.419.619.82020.220.420.620.8

Global Advantage and Global E Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.42-3.31-2.2-1.090.01.312.653.985.32 0.20.40.60.8
JavaScript chart by amCharts 3.21.15MIGIX MLMCX
       Returns  

Pair Trading with Global Advantage and Global E

The main advantage of trading using opposite Global Advantage and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Advantage position performs unexpectedly, Global E 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 E will offset losses from the drop in Global E's long position.
The idea behind Global Advantage Portfolio and Global E Portfolio 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.
Check out your portfolio center.
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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing