Correlation Between Global X and ValOre Metals
Can any of the company-specific risk be diversified away by investing in both Global X and ValOre Metals 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 ValOre Metals 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 ValOre Metals Corp, you can compare the effects of market volatilities on Global X and ValOre Metals 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 ValOre Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and ValOre Metals.
Diversification Opportunities for Global X and ValOre Metals
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and ValOre is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and ValOre Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ValOre Metals 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 ValOre Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ValOre Metals Corp has no effect on the direction of Global X i.e., Global X and ValOre Metals go up and down completely randomly.
Pair Corralation between Global X and ValOre Metals
Assuming the 90 days trading horizon Global X is expected to generate 17.33 times less return on investment than ValOre Metals. But when comparing it to its historical volatility, Global X Active is 18.96 times less risky than ValOre Metals. It trades about 0.07 of its potential returns per unit of risk. ValOre Metals Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.00 in ValOre Metals Corp on September 2, 2024 and sell it today you would earn a total of 1.00 from holding ValOre Metals Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Global X Active vs. ValOre Metals Corp
Performance |
| Timeline |
| Global X Active |
| ValOre Metals Corp |
Global X and ValOre Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and ValOre Metals
The main advantage of trading using opposite Global X and ValOre Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, ValOre Metals 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 ValOre Metals will offset losses from the drop in ValOre Metals' 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 |
| ValOre Metals vs. Forum Energy Metals | ValOre Metals vs. iShares Canadian HYBrid | ValOre Metals vs. Altagas Cum Red | ValOre Metals vs. European Residential Real |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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