Correlation Between Global X and Harvest Bank
Can any of the company-specific risk be diversified away by investing in both Global X and Harvest Bank 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 Harvest Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Active and Harvest Bank Leaders, you can compare the effects of market volatilities on Global X and Harvest Bank 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 Harvest Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Harvest Bank.
Diversification Opportunities for Global X and Harvest Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Harvest is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Harvest Bank Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Bank Leaders 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 Active are associated (or correlated) with Harvest Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Bank Leaders has no effect on the direction of Global X i.e., Global X and Harvest Bank go up and down completely randomly.
Pair Corralation between Global X and Harvest Bank
Assuming the 90 days trading horizon Global X is expected to generate 5.84 times less return on investment than Harvest Bank. But when comparing it to its historical volatility, Global X Active is 3.54 times less risky than Harvest Bank. It trades about 0.09 of its potential returns per unit of risk. Harvest Bank Leaders is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,124 in Harvest Bank Leaders on September 7, 2024 and sell it today you would earn a total of 316.00 from holding Harvest Bank Leaders or generate 28.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Harvest Bank Leaders
Performance |
| Timeline |
| Global X Active |
| Harvest Bank Leaders |
Global X and Harvest Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Harvest Bank
The main advantage of trading using opposite Global X and Harvest Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Harvest Bank 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 Harvest Bank will offset losses from the drop in Harvest Bank's long position.| Global X vs. BMO Sustainable Global | Global X vs. BMO Corporate Bond | Global X vs. BMO Core Plus | Global X vs. BMO Long Provincial |
| Harvest Bank vs. BMO Covered Call | Harvest Bank vs. BMO Canadian Dividend | Harvest Bank vs. BMO Covered Call | Harvest Bank vs. BMO Canadian High |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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