Correlation Between Global X and IMetal Resources
Can any of the company-specific risk be diversified away by investing in both Global X and IMetal Resources 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 IMetal Resources 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 iMetal Resources, you can compare the effects of market volatilities on Global X and IMetal Resources 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 IMetal Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IMetal Resources.
Diversification Opportunities for Global X and IMetal Resources
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and IMetal is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and iMetal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMetal Resources 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 IMetal Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMetal Resources has no effect on the direction of Global X i.e., Global X and IMetal Resources go up and down completely randomly.
Pair Corralation between Global X and IMetal Resources
Assuming the 90 days trading horizon Global X is expected to generate 1.78 times less return on investment than IMetal Resources. But when comparing it to its historical volatility, Global X Active is 10.18 times less risky than IMetal Resources. It trades about 0.05 of its potential returns per unit of risk. iMetal Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 23.00 in iMetal Resources on September 2, 2024 and sell it today you would lose (1.00) from holding iMetal Resources or give up 4.35% 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. iMetal Resources
Performance |
| Timeline |
| Global X Active |
| iMetal Resources |
Global X and IMetal Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IMetal Resources
The main advantage of trading using opposite Global X and IMetal Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IMetal Resources 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 IMetal Resources will offset losses from the drop in IMetal Resources' 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 |
| IMetal Resources vs. Verizon Communications CDR | IMetal Resources vs. Datable Technology Corp | IMetal Resources vs. CVW CleanTech | IMetal Resources vs. AGF Management Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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