Correlation Between Globus Medical and Encision
Can any of the company-specific risk be diversified away by investing in both Globus Medical and Encision 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 Globus Medical and Encision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical and Encision, you can compare the effects of market volatilities on Globus Medical and Encision 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 Globus Medical with a short position of Encision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical and Encision.
Diversification Opportunities for Globus Medical and Encision
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globus and Encision is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical and Encision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encision and Globus Medical 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 Globus Medical are associated (or correlated) with Encision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encision has no effect on the direction of Globus Medical i.e., Globus Medical and Encision go up and down completely randomly.
Pair Corralation between Globus Medical and Encision
If you would invest 5,115 in Globus Medical on January 25, 2024 and sell it today you would earn a total of 29.00 from holding Globus Medical or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Globus Medical vs. Encision
Performance |
| Timeline |
| Globus Medical |
| Encision |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Globus Medical and Encision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globus Medical and Encision
The main advantage of trading using opposite Globus Medical and Encision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical position performs unexpectedly, Encision 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 Encision will offset losses from the drop in Encision's long position.The idea behind Globus Medical and Encision 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.| Encision vs. Procyon | Encision vs. Environmmtl Tectonic | Encision vs. SCI Engineered Materials | Encision vs. Electronic Control Security |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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