Correlation Between Brompton Global and Global X
Can any of the company-specific risk be diversified away by investing in both Brompton Global 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 Brompton Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Global Dividend and Global X Active, you can compare the effects of market volatilities on Brompton Global 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 Brompton Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Global and Global X.
Diversification Opportunities for Brompton Global and Global X
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brompton and Global is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Global Dividend and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and Brompton Global 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 Brompton Global Dividend 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 Active has no effect on the direction of Brompton Global i.e., Brompton Global and Global X go up and down completely randomly.
Pair Corralation between Brompton Global and Global X
Assuming the 90 days trading horizon Brompton Global Dividend is expected to generate 2.2 times more return on investment than Global X. However, Brompton Global is 2.2 times more volatile than Global X Active. It trades about 0.14 of its potential returns per unit of risk. Global X Active is currently generating about 0.0 per unit of risk. If you would invest 2,143 in Brompton Global Dividend on August 28, 2024 and sell it today you would earn a total of 142.00 from holding Brompton Global Dividend or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton Global Dividend vs. Global X Active
Performance |
| Timeline |
| Brompton Global Dividend |
| Global X Active |
Brompton Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Global and Global X
The main advantage of trading using opposite Brompton Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Global 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.| Brompton Global vs. Global Healthcare Income | Brompton Global vs. Tech Leaders Income | Brompton Global vs. Brompton North American | Brompton Global vs. Brompton European Dividend |
| Global X vs. Mackenzie Core Plus | Global X vs. Mackenzie Unconstrained Bond | Global X vs. Mackenzie Floating Rate | Global X vs. Mackenzie Canadian Short |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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