Correlation Between Global X and Arizona Metals
Can any of the company-specific risk be diversified away by investing in both Global X and Arizona Metals 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 Arizona Metals 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 Arizona Metals Corp, you can compare the effects of market volatilities on Global X and Arizona Metals 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 Arizona Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Arizona Metals.
Diversification Opportunities for Global X and Arizona Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Arizona is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals 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 Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Global X i.e., Global X and Arizona Metals go up and down completely randomly.
Pair Corralation between Global X and Arizona Metals
Assuming the 90 days trading horizon Global X Active is expected to generate 0.07 times more return on investment than Arizona Metals. However, Global X Active is 15.38 times less risky than Arizona Metals. It trades about -0.16 of its potential returns per unit of risk. Arizona Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 989.00 in Global X Active on November 29, 2024 and sell it today you would lose (11.00) from holding Global X Active or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Arizona Metals Corp
Performance |
| Timeline |
| Global X Active |
| Arizona Metals Corp |
Global X and Arizona Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Arizona Metals
The main advantage of trading using opposite Global X and Arizona Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Arizona Metals 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 Arizona Metals will offset losses from the drop in Arizona Metals' long position.| Global X vs. Global X Equal | Global X vs. Global X Enhanced | Global X vs. Global X Gold | Global X vs. Global X Canadian |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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