Correlation Between BetaPro Equal and Global X
Can any of the company-specific risk be diversified away by investing in both BetaPro Equal 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 BetaPro Equal and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Equal Weight and Global X Cash, you can compare the effects of market volatilities on BetaPro Equal 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 BetaPro Equal with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Equal and Global X.
Diversification Opportunities for BetaPro Equal and Global X
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BetaPro and Global is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Equal Weight and Global X Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Cash and BetaPro Equal 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 BetaPro Equal Weight 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 Cash has no effect on the direction of BetaPro Equal i.e., BetaPro Equal and Global X go up and down completely randomly.
Pair Corralation between BetaPro Equal and Global X
Assuming the 90 days trading horizon BetaPro Equal Weight is expected to generate 13.28 times more return on investment than Global X. However, BetaPro Equal is 13.28 times more volatile than Global X Cash. It trades about 0.06 of its potential returns per unit of risk. Global X Cash is currently generating about 0.12 per unit of risk. If you would invest 1,760 in BetaPro Equal Weight on September 12, 2024 and sell it today you would earn a total of 1,153 from holding BetaPro Equal Weight or generate 65.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Equal Weight vs. Global X Cash
Performance |
| Timeline |
| BetaPro Equal Weight |
| Global X Cash |
BetaPro Equal and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Equal and Global X
The main advantage of trading using opposite BetaPro Equal and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Equal 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.| BetaPro Equal vs. BetaPro Gold Bullion | BetaPro Equal vs. BetaPro NASDAQ 100 2x | BetaPro Equal vs. BetaPro SP TSX | BetaPro Equal vs. BetaPro SP TSX |
| Global X vs. CI High Interest | Global X vs. GLOBAL X HIGH | Global X vs. Purpose High Interest | Global X vs. Global X USD |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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