Correlation Between BetaPro SPTSX and Global X
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX 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 SPTSX 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 SPTSX Capped and Global X Active, you can compare the effects of market volatilities on BetaPro SPTSX 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 SPTSX with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Global X.
Diversification Opportunities for BetaPro SPTSX and Global X
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BetaPro and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX Capped and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and BetaPro SPTSX 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 SPTSX Capped 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 Active has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Global X go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and Global X
Assuming the 90 days trading horizon BetaPro SPTSX Capped is expected to under-perform the Global X. In addition to that, BetaPro SPTSX is 6.47 times more volatile than Global X Active. It trades about -0.03 of its total potential returns per unit of risk. Global X Active is currently generating about 0.13 per unit of volatility. If you would invest 717.00 in Global X Active on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Global X Active or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SPTSX Capped vs. Global X Active
Performance |
| Timeline |
| BetaPro SPTSX Capped |
| Global X Active |
BetaPro SPTSX and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and Global X
The main advantage of trading using opposite BetaPro SPTSX and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX 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 SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SPTSX Capped | BetaPro SPTSX vs. BetaPro SPTSX 60 |
| Global X vs. Purpose Total Return | Global X vs. Purpose Multi Asset Income | Global X vs. Purpose Strategic Yield | Global X vs. BMO Aggregate Bond |
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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