Correlation Between Global X and Bank Of
Can any of the company-specific risk be diversified away by investing in both Global X and Bank Of 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 Bank Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and The Bank of, you can compare the effects of market volatilities on Global X and Bank Of 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 Bank Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Bank Of.
Diversification Opportunities for Global X and Bank Of
Almost no diversification
The 3 months correlation between Global and Bank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Bank 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 Funds are associated (or correlated) with Bank Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Bank has no effect on the direction of Global X i.e., Global X and Bank Of go up and down completely randomly.
Pair Corralation between Global X and Bank Of
Assuming the 90 days trading horizon Global X is expected to generate 1.89 times less return on investment than Bank Of. But when comparing it to its historical volatility, Global X Funds is 1.1 times less risky than Bank Of. It trades about 0.24 of its potential returns per unit of risk. The Bank of is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 43,630 in The Bank of on September 1, 2024 and sell it today you would earn a total of 5,802 from holding The Bank of or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. The Bank of
Performance |
| Timeline |
| Global X Funds |
| The Bank |
Global X and Bank Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Bank Of
The main advantage of trading using opposite Global X and Bank Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Bank Of 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 Bank Of will offset losses from the drop in Bank Of's long position.| Global X vs. Taiwan Semiconductor Manufacturing | Global X vs. Alibaba Group Holding | Global X vs. Microsoft | Global X vs. Alphabet |
| Bank Of vs. Banco BTG Pactual | Bank Of vs. Banco BTG Pactual | Bank Of vs. Hsi Malls Fundo | Bank Of vs. Habitat Ii |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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