Correlation Between Twitter and Global Sources

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

Diversification Opportunities for Twitter and Global Sources

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Twitter and Global Sources

If you would invest  4,701  in Twitter on December 30, 2023 and sell it today you would earn a total of  669.00  from holding Twitter or generate 14.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Twitter  vs.  Global Sources

 Performance 
       Timeline  
Twitter 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Global Sources 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Global Sources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Global Sources is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Twitter and Global Sources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Twitter and Global Sources

The main advantage of trading using opposite Twitter and Global Sources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Global Sources 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 Sources will offset losses from the drop in Global Sources' long position.
The idea behind Twitter and Global Sources 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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