Correlation Between Global X and Seagate Technology
Can any of the company-specific risk be diversified away by investing in both Global X and Seagate Technology 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 Seagate Technology 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 Seagate Technology Holdings, you can compare the effects of market volatilities on Global X and Seagate Technology 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 Seagate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Seagate Technology.
Diversification Opportunities for Global X and Seagate Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Seagate is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Seagate Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagate Technology 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 Seagate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagate Technology has no effect on the direction of Global X i.e., Global X and Seagate Technology go up and down completely randomly.
Pair Corralation between Global X and Seagate Technology
Assuming the 90 days trading horizon Global X Funds is expected to generate 0.63 times more return on investment than Seagate Technology. However, Global X Funds is 1.6 times less risky than Seagate Technology. It trades about 0.08 of its potential returns per unit of risk. Seagate Technology Holdings is currently generating about -0.01 per unit of risk. If you would invest 4,531 in Global X Funds on October 14, 2024 and sell it today you would earn a total of 334.00 from holding Global X Funds or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. Seagate Technology Holdings
Performance |
| Timeline |
| Global X Funds |
| Seagate Technology |
Global X and Seagate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Seagate Technology
The main advantage of trading using opposite Global X and Seagate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Seagate Technology 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 Seagate Technology will offset losses from the drop in Seagate Technology's long position.| Global X vs. Taiwan Semiconductor Manufacturing | Global X vs. Apple Inc | Global X vs. Alibaba Group Holding | Global X vs. Banco Santander Chile |
| Seagate Technology vs. salesforce inc | Seagate Technology vs. SK Telecom Co, | Seagate Technology vs. Global X Funds | Seagate Technology vs. Patria Investments Limited |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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