Correlation Between Global X and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Global X and Monument 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 Monument 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 Monument Mining Limited, you can compare the effects of market volatilities on Global X and Monument 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 Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Monument Mining.
Diversification Opportunities for Global X and Monument Mining
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Monument is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Global X i.e., Global X and Monument Mining go up and down completely randomly.
Pair Corralation between Global X and Monument Mining
Assuming the 90 days trading horizon Global X is expected to generate 10.12 times less return on investment than Monument Mining. But when comparing it to its historical volatility, Global X Active is 7.97 times less risky than Monument Mining. It trades about 0.06 of its potential returns per unit of risk. Monument Mining Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Monument Mining Limited on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Monument Mining Limited or generate 300.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Monument Mining Limited
Performance |
| Timeline |
| Global X Active |
| Monument Mining |
Global X and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Monument Mining
The main advantage of trading using opposite Global X and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Monument 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Global X vs. iShares SPTSX Canadian | Global X vs. Global X Active | Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income |
| Monument Mining vs. Solar Alliance Energy | Monument Mining vs. Global X Active | Monument Mining vs. Financial 15 Split | Monument Mining vs. Rubicon Organics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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