Correlation Between CD Private and Global X
Can any of the company-specific risk be diversified away by investing in both CD Private 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 CD Private and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CD Private Equity and Global X Hydrogen, you can compare the effects of market volatilities on CD Private 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 CD Private with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CD Private and Global X.
Diversification Opportunities for CD Private and Global X
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CD3 and Global is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CD Private Equity and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen and CD Private 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 CD Private Equity 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 Hydrogen has no effect on the direction of CD Private i.e., CD Private and Global X go up and down completely randomly.
Pair Corralation between CD Private and Global X
Assuming the 90 days trading horizon CD Private is expected to generate 2.89 times less return on investment than Global X. But when comparing it to its historical volatility, CD Private Equity is 1.31 times less risky than Global X. It trades about 0.04 of its potential returns per unit of risk. Global X Hydrogen is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 430.00 in Global X Hydrogen on August 25, 2024 and sell it today you would earn a total of 34.00 from holding Global X Hydrogen or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CD Private Equity vs. Global X Hydrogen
Performance |
| Timeline |
| CD Private Equity |
| Global X Hydrogen |
CD Private and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CD Private and Global X
The main advantage of trading using opposite CD Private and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD Private 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.| CD Private vs. iShares MSCI Emerging | CD Private vs. Global X Hydrogen | CD Private vs. Janus Henderson Sustainable | CD Private vs. JPMorgan Equity Premium |
| Global X vs. CD Private Equity | Global X vs. SPDR SPASX 200 | Global X vs. Ecofibre | Global X vs. iShares Global Healthcare |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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