Correlation Between US Global and Global X
Can any of the company-specific risk be diversified away by investing in both US 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 US 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 US Global GO and Global X Silver, you can compare the effects of market volatilities on US 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 US Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Global X.
Diversification Opportunities for US Global and Global X
Almost no diversification
The 3 months correlation between GOAU and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding US Global GO and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver and US 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 US Global GO 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 Silver has no effect on the direction of US Global i.e., US Global and Global X go up and down completely randomly.
Pair Corralation between US Global and Global X
Given the investment horizon of 90 days US Global is expected to generate 1.37 times less return on investment than Global X. But when comparing it to its historical volatility, US Global GO is 1.18 times less risky than Global X. It trades about 0.02 of its potential returns per unit of risk. Global X Silver is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,411 in Global X Silver on August 30, 2024 and sell it today you would earn a total of 132.00 from holding Global X Silver or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global GO vs. Global X Silver
Performance |
| Timeline |
| US Global GO |
| Global X Silver |
US Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Global X
The main advantage of trading using opposite US Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US 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.| US Global vs. Sprott Gold Miners | US Global vs. Global X Gold | US Global vs. Sprott Junior Gold | US Global vs. Amplify ETF Trust |
| Global X vs. Amplify ETF Trust | Global X vs. VanEck Junior Gold | Global X vs. Pan American Silver | Global X vs. Coeur Mining |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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