Correlation Between Global X and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Global X and Canada Nickel 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 Canada Nickel 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 Canada Nickel, you can compare the effects of market volatilities on Global X and Canada Nickel 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 Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Canada Nickel.
Diversification Opportunities for Global X and Canada Nickel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Canada is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Global X i.e., Global X and Canada Nickel go up and down completely randomly.
Pair Corralation between Global X and Canada Nickel
Assuming the 90 days trading horizon Global X Active is expected to generate 0.14 times more return on investment than Canada Nickel. However, Global X Active is 7.08 times less risky than Canada Nickel. It trades about 0.14 of its potential returns per unit of risk. Canada Nickel is currently generating about 0.01 per unit of risk. If you would invest 773.00 in Global X Active on September 2, 2024 and sell it today you would earn a total of 164.00 from holding Global X Active or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Global X Active vs. Canada Nickel
Performance |
| Timeline |
| Global X Active |
| Canada Nickel |
Global X and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Canada Nickel
The main advantage of trading using opposite Global X and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel'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 |
| Canada Nickel vs. FPX Nickel Corp | Canada Nickel vs. Talon Metals Corp | Canada Nickel vs. Giga Metals Corp | Canada Nickel vs. American Lithium Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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