Correlation Between Global X and Goldbank Mining
Can any of the company-specific risk be diversified away by investing in both Global X and Goldbank 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 Goldbank 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 Goldbank Mining Corp, you can compare the effects of market volatilities on Global X and Goldbank 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 Goldbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Goldbank Mining.
Diversification Opportunities for Global X and Goldbank Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Goldbank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Goldbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldbank 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 Goldbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldbank Mining Corp has no effect on the direction of Global X i.e., Global X and Goldbank Mining go up and down completely randomly.
Pair Corralation between Global X and Goldbank Mining
Assuming the 90 days trading horizon Global X is expected to generate 8.9 times less return on investment than Goldbank Mining. But when comparing it to its historical volatility, Global X Active is 19.1 times less risky than Goldbank Mining. It trades about 0.14 of its potential returns per unit of risk. Goldbank Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Goldbank Mining Corp on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Goldbank Mining Corp or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Goldbank Mining Corp
Performance |
| Timeline |
| Global X Active |
| Goldbank Mining Corp |
Global X and Goldbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Goldbank Mining
The main advantage of trading using opposite Global X and Goldbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Goldbank 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 Goldbank Mining will offset losses from the drop in Goldbank 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 |
| Goldbank Mining vs. First Majestic Silver | Goldbank Mining vs. Ivanhoe Energy | Goldbank Mining vs. Orezone Gold 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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