Correlation Between Core Alternative and Global X
Can any of the company-specific risk be diversified away by investing in both Core Alternative 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 Core Alternative and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Alternative ETF and Global X SP, you can compare the effects of market volatilities on Core Alternative 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 Core Alternative with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and Global X.
Diversification Opportunities for Core Alternative and Global X
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Core and Global is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and Core Alternative 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 Core Alternative ETF 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 SP has no effect on the direction of Core Alternative i.e., Core Alternative and Global X go up and down completely randomly.
Pair Corralation between Core Alternative and Global X
Given the investment horizon of 90 days Core Alternative ETF is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Core Alternative ETF is 1.04 times less risky than Global X. The etf trades about -0.01 of its potential returns per unit of risk. The Global X SP is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,704 in Global X SP on August 25, 2024 and sell it today you would earn a total of 610.00 from holding Global X SP or generate 22.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Alternative ETF vs. Global X SP
Performance |
| Timeline |
| Core Alternative ETF |
| Global X SP |
Core Alternative and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Alternative and Global X
The main advantage of trading using opposite Core Alternative and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Alternative 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.| Core Alternative vs. AGFiQ Market Neutral | Core Alternative vs. Cambria Global Momentum | Core Alternative vs. Cambria Global Asset | Core Alternative vs. Cambria Emerging Shareholder |
| Global X vs. WisdomTree 9060 Balanced | Global X vs. RPAR Risk Parity | Global X vs. Cambria Tail Risk | Global X vs. Aptus Defined Risk |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |