Correlation Between Global X and Champion Iron
Can any of the company-specific risk be diversified away by investing in both Global X and Champion Iron 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 Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Artificial and Champion Iron, you can compare the effects of market volatilities on Global X and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Champion Iron.
Diversification Opportunities for Global X and Champion Iron
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Champion is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Global X Artificial and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Artificial are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Global X i.e., Global X and Champion Iron go up and down completely randomly.
Pair Corralation between Global X and Champion Iron
Assuming the 90 days trading horizon Global X Artificial is expected to generate 0.43 times more return on investment than Champion Iron. However, Global X Artificial is 2.32 times less risky than Champion Iron. It trades about 0.11 of its potential returns per unit of risk. Champion Iron is currently generating about -0.04 per unit of risk. If you would invest 988.00 in Global X Artificial on September 1, 2024 and sell it today you would earn a total of 170.00 from holding Global X Artificial or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Global X Artificial vs. Champion Iron
Performance |
| Timeline |
| Global X Artificial |
| Champion Iron |
Global X and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Champion Iron
The main advantage of trading using opposite Global X and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| Global X vs. Champion Iron | Global X vs. Australian Dairy Farms | Global X vs. Perpetual Credit Income | Global X vs. Greentech Metals |
| Champion Iron vs. Dicker Data | Champion Iron vs. Data3 | Champion Iron vs. Retail Food Group | Champion Iron vs. Charter Hall Retail |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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