Correlation Between Global X and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Global X and Capstone Mining 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 Capstone Mining 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 Capstone Mining Corp, you can compare the effects of market volatilities on Global X and Capstone Mining 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 Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Capstone Mining.
Diversification Opportunities for Global X and Capstone Mining
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Capstone is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining 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 Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Global X i.e., Global X and Capstone Mining go up and down completely randomly.
Pair Corralation between Global X and Capstone Mining
Assuming the 90 days trading horizon Global X Active is expected to generate 0.15 times more return on investment than Capstone Mining. However, Global X Active is 6.5 times less risky than Capstone Mining. It trades about 0.21 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.0 per unit of risk. If you would invest 920.00 in Global X Active on September 2, 2024 and sell it today you would earn a total of 17.00 from holding Global X Active or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global X Active vs. Capstone Mining Corp
Performance |
| Timeline |
| Global X Active |
| Capstone Mining Corp |
Global X and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Capstone Mining
The main advantage of trading using opposite Global X and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining'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 |
| Capstone Mining vs. Computer Modelling Group | Capstone Mining vs. CVW CleanTech | Capstone Mining vs. Xtract One Technologies | Capstone Mining vs. Quisitive Technology Solutions |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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