Correlation Between Global X and Dynamic Active
Can any of the company-specific risk be diversified away by investing in both Global X and Dynamic Active 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 Dynamic Active 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 Dynamic Active Mid Cap, you can compare the effects of market volatilities on Global X and Dynamic Active 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 Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Dynamic Active.
Diversification Opportunities for Global X and Dynamic Active
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Dynamic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and Dynamic Active Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Mid 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 Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Mid has no effect on the direction of Global X i.e., Global X and Dynamic Active go up and down completely randomly.
Pair Corralation between Global X and Dynamic Active
Assuming the 90 days trading horizon Global X Natural is expected to under-perform the Dynamic Active. In addition to that, Global X is 2.15 times more volatile than Dynamic Active Mid Cap. It trades about -0.04 of its total potential returns per unit of risk. Dynamic Active Mid Cap is currently generating about 0.16 per unit of volatility. If you would invest 1,218 in Dynamic Active Mid Cap on September 1, 2024 and sell it today you would earn a total of 236.00 from holding Dynamic Active Mid Cap or generate 19.38% 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. Dynamic Active Mid Cap
Performance |
| Timeline |
| Global X Natural |
| Dynamic Active Mid |
Global X and Dynamic Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Dynamic Active
The main advantage of trading using opposite Global X and Dynamic Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Dynamic Active 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 Dynamic Active will offset losses from the drop in Dynamic Active's long position.| Global X vs. Global X Crude | Global X vs. Global X Silver | Global X vs. Global X Gold | Global X vs. Global X Active |
| Dynamic Active vs. iShares SPTSX Small | Dynamic Active vs. iShares Canadian Value | Dynamic Active vs. iShares Canadian Growth | Dynamic Active vs. iShares SPTSX Completion |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |