Correlation Between Forstrong Global and Global X
Can any of the company-specific risk be diversified away by investing in both Forstrong Global 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 Forstrong Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and Global X Seasonal, you can compare the effects of market volatilities on Forstrong Global 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 Forstrong Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and Global X.
Diversification Opportunities for Forstrong Global and Global X
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Forstrong and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and Global X Seasonal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Seasonal and Forstrong Global 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 Forstrong Global Income 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 Seasonal has no effect on the direction of Forstrong Global i.e., Forstrong Global and Global X go up and down completely randomly.
Pair Corralation between Forstrong Global and Global X
Assuming the 90 days trading horizon Forstrong Global Income is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Forstrong Global Income is 2.15 times less risky than Global X. The etf trades about -0.08 of its potential returns per unit of risk. The Global X Seasonal is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,080 in Global X Seasonal on September 2, 2024 and sell it today you would earn a total of 133.00 from holding Global X Seasonal or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Forstrong Global Income vs. Global X Seasonal
Performance |
| Timeline |
| Forstrong Global Income |
| Global X Seasonal |
Forstrong Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and Global X
The main advantage of trading using opposite Forstrong Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global 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.| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. NBI High Yield |
| Global X vs. Forstrong Global Income | Global X vs. iShares Canadian HYBrid | Global X vs. Brompton European Dividend | Global X vs. Solar Alliance Energy |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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