Correlation Between Global X and Neo Battery
Can any of the company-specific risk be diversified away by investing in both Global X and Neo Battery 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 Neo Battery 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 Neo Battery Materials, you can compare the effects of market volatilities on Global X and Neo Battery 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 Neo Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Neo Battery.
Diversification Opportunities for Global X and Neo Battery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Neo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Neo Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Battery Materials 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 Neo Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Battery Materials has no effect on the direction of Global X i.e., Global X and Neo Battery go up and down completely randomly.
Pair Corralation between Global X and Neo Battery
Assuming the 90 days trading horizon Global X is expected to generate 60.15 times less return on investment than Neo Battery. But when comparing it to its historical volatility, Global X Active is 18.52 times less risky than Neo Battery. It trades about 0.14 of its potential returns per unit of risk. Neo Battery Materials is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Neo Battery Materials on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Neo Battery Materials or generate 112.5% 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. Neo Battery Materials
Performance |
| Timeline |
| Global X Active |
| Neo Battery Materials |
Global X and Neo Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Neo Battery
The main advantage of trading using opposite Global X and Neo Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Neo Battery 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 Neo Battery will offset losses from the drop in Neo Battery's long position.| Global X vs. Global X Active | Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income | Global X vs. BMO Aggregate Bond |
| Neo Battery vs. Solar Alliance Energy | Neo Battery vs. Global X Active | Neo Battery vs. Financial 15 Split | Neo Battery 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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