Correlation Between Global X and NBI Liquid
Can any of the company-specific risk be diversified away by investing in both Global X and NBI Liquid 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 NBI Liquid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X ReSolve and NBI Liquid Alternatives, you can compare the effects of market volatilities on Global X and NBI Liquid 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 NBI Liquid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and NBI Liquid.
Diversification Opportunities for Global X and NBI Liquid
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and NBI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global X ReSolve and NBI Liquid Alternatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Liquid Alternatives 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 ReSolve are associated (or correlated) with NBI Liquid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Liquid Alternatives has no effect on the direction of Global X i.e., Global X and NBI Liquid go up and down completely randomly.
Pair Corralation between Global X and NBI Liquid
Assuming the 90 days trading horizon Global X is expected to generate 1.01 times less return on investment than NBI Liquid. But when comparing it to its historical volatility, Global X ReSolve is 1.22 times less risky than NBI Liquid. It trades about 0.12 of its potential returns per unit of risk. NBI Liquid Alternatives is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,202 in NBI Liquid Alternatives on October 25, 2024 and sell it today you would earn a total of 46.00 from holding NBI Liquid Alternatives or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X ReSolve vs. NBI Liquid Alternatives
Performance |
| Timeline |
| Global X ReSolve |
| NBI Liquid Alternatives |
Global X and NBI Liquid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and NBI Liquid
The main advantage of trading using opposite Global X and NBI Liquid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, NBI Liquid 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 NBI Liquid will offset losses from the drop in NBI Liquid's long position.| Global X vs. NBI Liquid Alternatives | Global X vs. Franklin ClearBridge Sustainable | Global X vs. Purpose Core Dividend | Global X vs. Global X 7 10 |
| NBI Liquid vs. AGFiQ Market Neutral | NBI Liquid vs. Picton Mahoney Fortified | NBI Liquid vs. Purpose Diversified Real | NBI Liquid vs. Desjardins Alt LongShort |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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