Correlation Between Global X and CI International
Can any of the company-specific risk be diversified away by investing in both Global X and CI International 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 CI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Semiconductor and CI International Quality, you can compare the effects of market volatilities on Global X and CI International 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 CI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and CI International.
Diversification Opportunities for Global X and CI International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and IQD is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Global X Semiconductor and CI International Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI International Quality 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 Semiconductor are associated (or correlated) with CI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI International Quality has no effect on the direction of Global X i.e., Global X and CI International go up and down completely randomly.
Pair Corralation between Global X and CI International
Assuming the 90 days trading horizon Global X Semiconductor is expected to under-perform the CI International. In addition to that, Global X is 2.74 times more volatile than CI International Quality. It trades about -0.02 of its total potential returns per unit of risk. CI International Quality is currently generating about -0.03 per unit of volatility. If you would invest 3,558 in CI International Quality on September 5, 2024 and sell it today you would lose (102.00) from holding CI International Quality or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Global X Semiconductor vs. CI International Quality
Performance |
| Timeline |
| Global X Semiconductor |
| CI International Quality |
Global X and CI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and CI International
The main advantage of trading using opposite Global X and CI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, CI International 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 CI International will offset losses from the drop in CI International's long position.| Global X vs. Global X Equal | Global X vs. Global X Enhanced | Global X vs. Global X Gold | Global X vs. Global X Canadian |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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