Correlation Between HTC Purenergy and Globex Mining

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

By analyzing existing cross correlation between HTC Purenergy and Globex Mining Enterprises, you can compare the effects of market volatilities on HTC Purenergy and Globex Mining 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 HTC Purenergy with a short position of Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HTC Purenergy and Globex Mining.

Diversification Opportunities for HTC Purenergy and Globex Mining

-0.02

Correlation Coefficient

HTC Purenergy  Globex Mining

Good diversification

The 3 months correlation between HTC and Globex is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding HTC Purenergy and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises and HTC Purenergy 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 HTC Purenergy are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of HTC Purenergy i.e., HTC Purenergy and Globex Mining go up and down completely randomly.

Pair Corralation between HTC Purenergy and Globex Mining

If you would invest  63.00  in Globex Mining Enterprises on January 24, 2024 and sell it today you would earn a total of  13.00  from holding Globex Mining Enterprises or generate 20.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

HTC Purenergy  vs.  Globex Mining Enterprises

HTC Purenergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HTC Purenergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Globex Mining Enterprises

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globex Mining Enterprises are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Globex Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HTC Purenergy and Globex Mining

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

The idea behind HTC Purenergy and Globex Mining Enterprises 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.