Correlation Between Airlie Australian and Global X
Can any of the company-specific risk be diversified away by investing in both Airlie Australian and Global X 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 Airlie Australian and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airlie Australian Share and Global X SP, you can compare the effects of market volatilities on Airlie Australian and Global X 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 Airlie Australian with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airlie Australian and Global X.
Diversification Opportunities for Airlie Australian and Global X
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airlie and Global is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Airlie Australian Share and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and Airlie Australian 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 Airlie Australian Share are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SP has no effect on the direction of Airlie Australian i.e., Airlie Australian and Global X go up and down completely randomly.
Pair Corralation between Airlie Australian and Global X
Assuming the 90 days trading horizon Airlie Australian is expected to generate 2.16 times less return on investment than Global X. But when comparing it to its historical volatility, Airlie Australian Share is 1.65 times less risky than Global X. It trades about 0.16 of its potential returns per unit of risk. Global X SP is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,056 in Global X SP on August 30, 2024 and sell it today you would earn a total of 53.00 from holding Global X SP or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airlie Australian Share vs. Global X SP
Performance |
| Timeline |
| Airlie Australian Share |
| Global X SP |
Airlie Australian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airlie Australian and Global X
The main advantage of trading using opposite Airlie Australian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airlie Australian position performs unexpectedly, Global X 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 X will offset losses from the drop in Global X's long position.| Airlie Australian vs. iShares MSCI Emerging | Airlie Australian vs. Global X Hydrogen | Airlie Australian vs. Janus Henderson Sustainable | Airlie Australian vs. JPMorgan Equity Premium |
| Global X vs. BetaShares Geared Australian | Global X vs. BetaShares Global Robotics | Global X vs. iShares China LargeCap | Global X vs. Russell Australian Government |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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