Correlation Between Global X and BetaPro Natural
Can any of the company-specific risk be diversified away by investing in both Global X and BetaPro Natural 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 BetaPro Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Cash and BetaPro Natural Gas, you can compare the effects of market volatilities on Global X and BetaPro Natural 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 BetaPro Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BetaPro Natural.
Diversification Opportunities for Global X and BetaPro Natural
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and BetaPro is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Global X Cash and BetaPro Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Natural Gas 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 Cash are associated (or correlated) with BetaPro Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Natural Gas has no effect on the direction of Global X i.e., Global X and BetaPro Natural go up and down completely randomly.
Pair Corralation between Global X and BetaPro Natural
Assuming the 90 days trading horizon Global X is expected to generate 1.63 times less return on investment than BetaPro Natural. But when comparing it to its historical volatility, Global X Cash is 78.37 times less risky than BetaPro Natural. It trades about 0.2 of its potential returns per unit of risk. BetaPro Natural Gas is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,707 in BetaPro Natural Gas on October 21, 2024 and sell it today you would lose (846.00) from holding BetaPro Natural Gas or give up 49.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Cash vs. BetaPro Natural Gas
Performance |
| Timeline |
| Global X Cash |
| BetaPro Natural Gas |
Global X and BetaPro Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BetaPro Natural
The main advantage of trading using opposite Global X and BetaPro Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BetaPro Natural 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 BetaPro Natural will offset losses from the drop in BetaPro Natural's long position.| Global X vs. iShares SPTSX 60 | Global X vs. iShares Core SP | Global X vs. iShares Core SPTSX | Global X vs. BMO Aggregate Bond |
| BetaPro Natural vs. BetaPro NASDAQ 100 2x | BetaPro Natural vs. BetaPro Canadian Gold | BetaPro Natural vs. BetaPro SP 500 | BetaPro Natural vs. BetaPro Crude Oil |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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