Correlation Between Global X and Cable One
Can any of the company-specific risk be diversified away by investing in both Global X and Cable One 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 Cable One 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 Cable One, you can compare the effects of market volatilities on Global X and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Cable One.
Diversification Opportunities for Global X and Cable One
Almost no diversification
The 3 months correlation between Global and Cable is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Global X i.e., Global X and Cable One go up and down completely randomly.
Pair Corralation between Global X and Cable One
Assuming the 90 days trading horizon Global X Funds is expected to generate 0.72 times more return on investment than Cable One. However, Global X Funds is 1.4 times less risky than Cable One. It trades about 0.19 of its potential returns per unit of risk. Cable One is currently generating about -0.03 per unit of risk. If you would invest 4,760 in Global X Funds on September 15, 2024 and sell it today you would earn a total of 260.00 from holding Global X Funds or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Global X Funds vs. Cable One
Performance |
| Timeline |
| Global X Funds |
| Cable One |
Global X and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Cable One
The main advantage of trading using opposite Global X and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Global X vs. Taiwan Semiconductor Manufacturing | Global X vs. Apple Inc | Global X vs. Alibaba Group Holding | Global X vs. Microsoft |
| Cable One vs. Multilaser Industrial SA | Cable One vs. Automatic Data Processing | Cable One vs. Brpr Corporate Offices | Cable One vs. United Rentals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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