Correlation Between CI High and GLOBAL X
Can any of the company-specific risk be diversified away by investing in both CI High 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 CI High and GLOBAL X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI High Interest and GLOBAL X HIGH, you can compare the effects of market volatilities on CI High 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 CI High with a short position of GLOBAL X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI High and GLOBAL X.
Diversification Opportunities for CI High and GLOBAL X
Good diversification
The 3 months correlation between CSAV and GLOBAL is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CI High Interest and GLOBAL X HIGH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL X HIGH and CI High 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 CI High Interest 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 HIGH has no effect on the direction of CI High i.e., CI High and GLOBAL X go up and down completely randomly.
Pair Corralation between CI High and GLOBAL X
Assuming the 90 days trading horizon CI High Interest is not expected to generate positive returns. Moreover, CI High is 3.8 times more volatile than GLOBAL X HIGH. It trades away all of its potential returns to assume current level of volatility. GLOBAL X HIGH is currently generating about 0.73 per unit of risk. If you would invest 4,990 in GLOBAL X HIGH on September 12, 2024 and sell it today you would earn a total of 15.00 from holding GLOBAL X HIGH or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI High Interest vs. GLOBAL X HIGH
Performance |
| Timeline |
| CI High Interest |
| GLOBAL X HIGH |
CI High and GLOBAL X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI High and GLOBAL X
The main advantage of trading using opposite CI High and GLOBAL X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI High 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.| CI High vs. Purpose High Interest | CI High vs. GLOBAL X HIGH | CI High vs. Global X Cash | CI High vs. iShares Premium Money |
| GLOBAL X vs. Purpose High Interest | GLOBAL X vs. CI High Interest | GLOBAL X vs. Global X Cash | GLOBAL X vs. iShares Core Equity |
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.
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