Correlation Between Global X and CI Enhanced
Can any of the company-specific risk be diversified away by investing in both Global X and CI Enhanced 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 CI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X 7 10 and CI Enhanced Short, you can compare the effects of market volatilities on Global X and CI Enhanced 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 CI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and CI Enhanced.
Diversification Opportunities for Global X and CI Enhanced
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and FSB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Global X 7 10 and CI Enhanced Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Enhanced Short 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 7 10 are associated (or correlated) with CI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Enhanced Short has no effect on the direction of Global X i.e., Global X and CI Enhanced go up and down completely randomly.
Pair Corralation between Global X and CI Enhanced
Assuming the 90 days trading horizon Global X is expected to generate 2.15 times less return on investment than CI Enhanced. In addition to that, Global X is 3.13 times more volatile than CI Enhanced Short. It trades about 0.02 of its total potential returns per unit of risk. CI Enhanced Short is currently generating about 0.16 per unit of volatility. If you would invest 842.00 in CI Enhanced Short on August 29, 2024 and sell it today you would earn a total of 124.00 from holding CI Enhanced Short or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X 7 10 vs. CI Enhanced Short
Performance |
| Timeline |
| Global X 7 |
| CI Enhanced Short |
Global X and CI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and CI Enhanced
The main advantage of trading using opposite Global X and CI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, CI Enhanced 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 CI Enhanced will offset losses from the drop in CI Enhanced's long position.| Global X vs. Global X Canadian | Global X vs. iShares MSCI Canada | Global X vs. Global X Europe | Global X vs. Global X Intl |
| CI Enhanced vs. CI Investment Grade | CI Enhanced vs. CI Enhanced Government | CI Enhanced vs. CI Preferred Share | CI Enhanced vs. CI Short Term |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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