Correlation Between Global X and Pinnacle Sherman
Can any of the company-specific risk be diversified away by investing in both Global X and Pinnacle Sherman 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 Pinnacle Sherman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X FinTech and Pinnacle Sherman Multi Strategy, you can compare the effects of market volatilities on Global X and Pinnacle Sherman 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 Pinnacle Sherman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Pinnacle Sherman.
Diversification Opportunities for Global X and Pinnacle Sherman
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Pinnacle is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Global X FinTech and Pinnacle Sherman Multi Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Sherman Multi 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 FinTech are associated (or correlated) with Pinnacle Sherman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Sherman Multi has no effect on the direction of Global X i.e., Global X and Pinnacle Sherman go up and down completely randomly.
Pair Corralation between Global X and Pinnacle Sherman
Given the investment horizon of 90 days Global X FinTech is expected to generate 1.49 times more return on investment than Pinnacle Sherman. However, Global X is 1.49 times more volatile than Pinnacle Sherman Multi Strategy. It trades about 0.18 of its potential returns per unit of risk. Pinnacle Sherman Multi Strategy is currently generating about 0.11 per unit of risk. If you would invest 2,502 in Global X FinTech on September 1, 2024 and sell it today you would earn a total of 898.00 from holding Global X FinTech or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X FinTech vs. Pinnacle Sherman Multi Strateg
Performance |
| Timeline |
| Global X FinTech |
| Pinnacle Sherman Multi |
Global X and Pinnacle Sherman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Pinnacle Sherman
The main advantage of trading using opposite Global X and Pinnacle Sherman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Pinnacle Sherman 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 Pinnacle Sherman will offset losses from the drop in Pinnacle Sherman's long position.| Global X vs. Nexalin Technology | Global X vs. Kilroy Realty Corp | Global X vs. Highwoods Properties | Global X vs. Karat Packaging |
| Pinnacle Sherman vs. Rbc Emerging Markets | Pinnacle Sherman vs. Ab All Market | Pinnacle Sherman vs. Vanguard Developed Markets | Pinnacle Sherman vs. Calvert Developed Market |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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