Correlation Between Forum Energy and Global X
Can any of the company-specific risk be diversified away by investing in both Forum Energy 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 Forum Energy and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Metals and Global X Active, you can compare the effects of market volatilities on Forum Energy 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 Forum Energy with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Global X.
Diversification Opportunities for Forum Energy and Global X
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Forum and Global is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Metals and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and Forum Energy 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 Forum Energy Metals 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 Active has no effect on the direction of Forum Energy i.e., Forum Energy and Global X go up and down completely randomly.
Pair Corralation between Forum Energy and Global X
Assuming the 90 days horizon Forum Energy Metals is expected to generate 10.06 times more return on investment than Global X. However, Forum Energy is 10.06 times more volatile than Global X Active. It trades about 0.03 of its potential returns per unit of risk. Global X Active is currently generating about 0.1 per unit of risk. If you would invest 8.00 in Forum Energy Metals on August 31, 2024 and sell it today you would lose (0.50) from holding Forum Energy Metals or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Metals vs. Global X Active
Performance |
| Timeline |
| Forum Energy Metals |
| Global X Active |
Forum Energy and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Global X
The main advantage of trading using opposite Forum Energy and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy 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.| Forum Energy vs. Solar Alliance Energy | Forum Energy vs. Global X Active | Forum Energy vs. Financial 15 Split | Forum Energy vs. Rubicon Organics |
| Global X vs. iShares SPTSX Canadian | Global X vs. Global X Active | Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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