Correlation Between Global X and EcoSynthetix
Can any of the company-specific risk be diversified away by investing in both Global X and EcoSynthetix 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 EcoSynthetix 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 EcoSynthetix, you can compare the effects of market volatilities on Global X and EcoSynthetix 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 EcoSynthetix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and EcoSynthetix.
Diversification Opportunities for Global X and EcoSynthetix
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and EcoSynthetix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix 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 EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of Global X i.e., Global X and EcoSynthetix go up and down completely randomly.
Pair Corralation between Global X and EcoSynthetix
Assuming the 90 days trading horizon Global X Active is expected to generate 0.18 times more return on investment than EcoSynthetix. However, Global X Active is 5.66 times less risky than EcoSynthetix. It trades about 0.21 of its potential returns per unit of risk. EcoSynthetix is currently generating about -0.05 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global X Active vs. EcoSynthetix
Performance |
| Timeline |
| Global X Active |
| EcoSynthetix |
Global X and EcoSynthetix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and EcoSynthetix
The main advantage of trading using opposite Global X and EcoSynthetix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, EcoSynthetix 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 EcoSynthetix will offset losses from the drop in EcoSynthetix'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 |
| EcoSynthetix vs. DIRTT Environmental Solutions | EcoSynthetix vs. 5N Plus | EcoSynthetix vs. Colabor Group | EcoSynthetix vs. TeraGo Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |