Correlation Between Global Partners and Global Partners

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

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

Diversification Opportunities for Global Partners and Global Partners

-0.24

Correlation Coefficient

Global Partners  Global Partners

Very good diversification

The 3 months correlation between Global and Global is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP and Global Partners 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 Partners LP are associated (or correlated) with Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Global Partners i.e., Global Partners and Global Partners go up and down completely randomly.

Pair Corralation between Global Partners and Global Partners

Assuming the 90 days trading horizon Global Partners LP is expected to generate 1.63 times more return on investment than Global Partners. However, Global Partners is 1.63 times more volatile than Global Partners LP. It trades about 0.04 of its potential returns per unit of risk. Global Partners LP is currently generating about 0.06 per unit of risk. If you would invest  2,154  in Global Partners LP on January 29, 2024 and sell it today you would earn a total of  396.00  from holding Global Partners LP or generate 18.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.98%
Values	Daily Returns

Global Partners LP  vs.  Global Partners LP

Global Partners LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Partners LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Global Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Partners LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Partners LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Global Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Partners and Global Partners

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

The idea behind Global Partners LP and Global Partners LP 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.