Correlation Between Global X and Gitennes Exploration
Can any of the company-specific risk be diversified away by investing in both Global X and Gitennes Exploration 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 Gitennes Exploration 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 Gitennes Exploration, you can compare the effects of market volatilities on Global X and Gitennes Exploration 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 Gitennes Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Gitennes Exploration.
Diversification Opportunities for Global X and Gitennes Exploration
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Gitennes is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Gitennes Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitennes Exploration 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 Gitennes Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gitennes Exploration has no effect on the direction of Global X i.e., Global X and Gitennes Exploration go up and down completely randomly.
Pair Corralation between Global X and Gitennes Exploration
Assuming the 90 days trading horizon Global X is expected to generate 145.23 times less return on investment than Gitennes Exploration. But when comparing it to its historical volatility, Global X Active is 86.06 times less risky than Gitennes Exploration. It trades about 0.07 of its potential returns per unit of risk. Gitennes Exploration is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Gitennes Exploration on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Gitennes Exploration or generate 190.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Global X Active vs. Gitennes Exploration
Performance |
| Timeline |
| Global X Active |
| Gitennes Exploration |
Global X and Gitennes Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Gitennes Exploration
The main advantage of trading using opposite Global X and Gitennes Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Gitennes Exploration 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 Gitennes Exploration will offset losses from the drop in Gitennes Exploration'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 |
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.
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