Correlation Between Global X and Russell Australian
Can any of the company-specific risk be diversified away by investing in both Global X and Russell Australian 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 Russell Australian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Hydrogen and Russell Australian Government, you can compare the effects of market volatilities on Global X and Russell Australian 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 Russell Australian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Russell Australian.
Diversification Opportunities for Global X and Russell Australian
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Russell is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and Russell Australian Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russell Australian 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 Hydrogen are associated (or correlated) with Russell Australian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell Australian has no effect on the direction of Global X i.e., Global X and Russell Australian go up and down completely randomly.
Pair Corralation between Global X and Russell Australian
Assuming the 90 days trading horizon Global X Hydrogen is expected to under-perform the Russell Australian. In addition to that, Global X is 4.08 times more volatile than Russell Australian Government. It trades about -0.03 of its total potential returns per unit of risk. Russell Australian Government is currently generating about 0.01 per unit of volatility. If you would invest 1,876 in Russell Australian Government on September 4, 2024 and sell it today you would earn a total of 20.00 from holding Russell Australian Government or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Global X Hydrogen vs. Russell Australian Government
Performance |
| Timeline |
| Global X Hydrogen |
| Russell Australian |
Global X and Russell Australian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Russell Australian
The main advantage of trading using opposite Global X and Russell Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Russell Australian 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 Russell Australian will offset losses from the drop in Russell Australian's long position.| Global X vs. Betashares Asia Technology | Global X vs. CD Private Equity | Global X vs. BetaShares Australia 200 | Global X vs. Australian High Interest |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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