Correlation Between Global X and Advisors Asset

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

Diversification Opportunities for Global X and Advisors Asset

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Global and Advisors is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global X Alternative and Advisors Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Asset Management and Global X 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 X Alternative are associated (or correlated) with Advisors Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Asset Management has no effect on the direction of Global X i.e., Global X and Advisors Asset go up and down completely randomly.

Pair Corralation between Global X and Advisors Asset

If you would invest  1,184  in Global X Alternative on September 14, 2024 and sell it today you would earn a total of  4.00  from holding Global X Alternative or generate 0.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy4.76%
ValuesDaily Returns

Global X Alternative  vs.  Advisors Asset Management

 Performance 
       Timeline  
Global X Alternative 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Alternative are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Global X is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Advisors Asset Management 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Advisors Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain primary indicators, Advisors Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Global X and Advisors Asset Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global X and Advisors Asset

The main advantage of trading using opposite Global X and Advisors Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Advisors Asset 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 Advisors Asset will offset losses from the drop in Advisors Asset's long position.
The idea behind Global X Alternative and Advisors Asset Management 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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