Correlation Between Global X and Africa Energy
Can any of the company-specific risk be diversified away by investing in both Global X and Africa Energy 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 Africa Energy 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 Africa Energy Corp, you can compare the effects of market volatilities on Global X and Africa Energy 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 Africa Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Africa Energy.
Diversification Opportunities for Global X and Africa Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Africa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Africa Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Energy Corp 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 Africa Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Energy Corp has no effect on the direction of Global X i.e., Global X and Africa Energy go up and down completely randomly.
Pair Corralation between Global X and Africa Energy
Assuming the 90 days trading horizon Global X Active is expected to generate 0.04 times more return on investment than Africa Energy. However, Global X Active is 23.17 times less risky than Africa Energy. It trades about 0.07 of its potential returns per unit of risk. Africa Energy Corp is currently generating about -0.02 per unit of risk. If you would invest 897.00 in Global X Active on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Global X Active or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Africa Energy Corp
Performance |
| Timeline |
| Global X Active |
| Africa Energy Corp |
Global X and Africa Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Africa Energy
The main advantage of trading using opposite Global X and Africa Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Africa Energy 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 Africa Energy will offset losses from the drop in Africa Energy's long position.| Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income | Global X vs. BMO Aggregate Bond | Global X vs. iShares Canadian HYBrid |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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