Correlation Between Global X and CI Global
Can any of the company-specific risk be diversified away by investing in both Global X and CI 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 CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Natural and CI Global Climate, you can compare the effects of market volatilities on Global X and CI 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 CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and CI Global.
Diversification Opportunities for Global X and CI Global
Very good diversification
The 3 months correlation between Global and CLML is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and CI Global Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Climate 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 Natural are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Climate has no effect on the direction of Global X i.e., Global X and CI Global go up and down completely randomly.
Pair Corralation between Global X and CI Global
Assuming the 90 days trading horizon Global X Natural is expected to under-perform the CI Global. In addition to that, Global X is 1.67 times more volatile than CI Global Climate. It trades about -0.09 of its total potential returns per unit of risk. CI Global Climate is currently generating about 0.12 per unit of volatility. If you would invest 1,916 in CI Global Climate on September 3, 2024 and sell it today you would earn a total of 1,573 from holding CI Global Climate or generate 82.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Natural vs. CI Global Climate
Performance |
| Timeline |
| Global X Natural |
| CI Global Climate |
Global X and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and CI Global
The main advantage of trading using opposite Global X and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, CI 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 CI Global will offset losses from the drop in CI Global's long position.| Global X vs. Global X Crude | Global X vs. Global X Gold | Global X vs. Global X Active | Global X vs. Global X Active |
| CI Global vs. NBI High Yield | CI Global vs. NBI Unconstrained Fixed | CI Global vs. Mackenzie Developed ex North | CI Global vs. BMO Short Term Bond |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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