Correlation Between Global X and Forstrong Global
Can any of the company-specific risk be diversified away by investing in both Global X and Forstrong Global 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 Forstrong Global 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 Forstrong Global Income, you can compare the effects of market volatilities on Global X and Forstrong Global 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 Forstrong Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Forstrong Global.
Diversification Opportunities for Global X and Forstrong Global
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Forstrong is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Forstrong Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global Income 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 Forstrong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forstrong Global Income has no effect on the direction of Global X i.e., Global X and Forstrong Global go up and down completely randomly.
Pair Corralation between Global X and Forstrong Global
Assuming the 90 days trading horizon Global X Active is expected to generate 1.01 times more return on investment than Forstrong Global. However, Global X is 1.01 times more volatile than Forstrong Global Income. It trades about 0.3 of its potential returns per unit of risk. Forstrong Global Income is currently generating about -0.08 per unit of risk. If you would invest 891.00 in Global X Active on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Global X Active or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Forstrong Global Income
Performance |
| Timeline |
| Global X Active |
| Forstrong Global Income |
Global X and Forstrong Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Forstrong Global
The main advantage of trading using opposite Global X and Forstrong Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Forstrong Global 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 Forstrong Global will offset losses from the drop in Forstrong Global's long position.| Global X vs. iShares SPTSX Canadian | Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income | Global X vs. BMO Aggregate Bond |
| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. NBI High Yield |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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