Correlation Between Champion Iron and Global X
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Global X Treasury, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Global X.
Diversification Opportunities for Champion Iron and Global X
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champion and Global is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Global X Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Treasury and Champion Iron 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 Champion Iron 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 Treasury has no effect on the direction of Champion Iron i.e., Champion Iron and Global X go up and down completely randomly.
Pair Corralation between Champion Iron and Global X
Assuming the 90 days trading horizon Champion Iron is expected to generate 5.92 times more return on investment than Global X. However, Champion Iron is 5.92 times more volatile than Global X Treasury. It trades about 0.0 of its potential returns per unit of risk. Global X Treasury is currently generating about 0.01 per unit of risk. If you would invest 645.00 in Champion Iron on September 3, 2024 and sell it today you would lose (69.00) from holding Champion Iron or give up 10.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Global X Treasury
Performance |
| Timeline |
| Champion Iron |
| Global X Treasury |
Champion Iron and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Global X
The main advantage of trading using opposite Champion Iron and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.| Champion Iron vs. Northern Star Resources | Champion Iron vs. Evolution Mining | Champion Iron vs. Bluescope Steel | Champion Iron vs. Aneka Tambang Tbk |
| Global X vs. Betashares Asia Technology | Global X vs. CD Private Equity | Global X vs. BetaShares Australia 200 | Global X vs. Australian High Interest |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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