Correlation Between Global X and Empire Metals
Can any of the company-specific risk be diversified away by investing in both Global X and Empire 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 Empire 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 Empire Metals Corp, you can compare the effects of market volatilities on Global X and Empire 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Empire Metals.
Diversification Opportunities for Global X and Empire Metals
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Empire is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Empire Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Corp has no effect on the direction of Global X i.e., Global X and Empire Metals go up and down completely randomly.
Pair Corralation between Global X and Empire Metals
Assuming the 90 days trading horizon Global X is expected to generate 8.55 times less return on investment than Empire Metals. But when comparing it to its historical volatility, Global X Active is 27.31 times less risky than Empire Metals. It trades about 0.14 of its potential returns per unit of risk. Empire Metals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Empire Metals Corp on September 2, 2024 and sell it today you would lose (3.00) from holding Empire Metals Corp or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Empire Metals Corp
Performance |
| Timeline |
| Global X Active |
| Empire Metals Corp |
Global X and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Empire Metals
The main advantage of trading using opposite Global X and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Empire 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 Empire Metals will offset losses from the drop in Empire Metals' 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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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