Correlation Between Global X and Harvest Global
Can any of the company-specific risk be diversified away by investing in both Global X and Harvest Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Big and Harvest Global REIT, you can compare the effects of market volatilities on Global X and Harvest Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Harvest Global.
Diversification Opportunities for Global X and Harvest Global
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Harvest is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Global X Big and Harvest Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Global REIT 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 Big are associated (or correlated) with Harvest Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Global REIT has no effect on the direction of Global X i.e., Global X and Harvest Global go up and down completely randomly.
Pair Corralation between Global X and Harvest Global
Assuming the 90 days trading horizon Global X Big is expected to generate 2.42 times more return on investment than Harvest Global. However, Global X is 2.42 times more volatile than Harvest Global REIT. It trades about 0.08 of its potential returns per unit of risk. Harvest Global REIT is currently generating about 0.05 per unit of risk. If you would invest 1,937 in Global X Big on September 12, 2024 and sell it today you would earn a total of 1,344 from holding Global X Big or generate 69.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Big vs. Harvest Global REIT
Performance |
| Timeline |
| Global X Big |
| Harvest Global REIT |
Global X and Harvest Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Harvest Global
The main advantage of trading using opposite Global X and Harvest Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Harvest Global 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 Global will offset losses from the drop in Harvest Global's long position.| Global X vs. iShares SPTSX 60 | Global X vs. iShares Core SP | Global X vs. iShares Core SPTSX | Global X vs. BMO Aggregate Bond |
| Harvest Global vs. Harvest Equal Weight | Harvest Global vs. Harvest Brand Leaders | Harvest Global vs. Energy Leaders Plus | Harvest Global vs. Harvest Tech Achievers |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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