Correlation Between Global X and Brompton European
Can any of the company-specific risk be diversified away by investing in both Global X and Brompton European 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 Brompton European 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 Brompton European Dividend, you can compare the effects of market volatilities on Global X and Brompton European 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 Brompton European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Brompton European.
Diversification Opportunities for Global X and Brompton European
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Brompton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and Brompton European Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton European 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 Brompton European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton European has no effect on the direction of Global X i.e., Global X and Brompton European go up and down completely randomly.
Pair Corralation between Global X and Brompton European
Assuming the 90 days trading horizon Global X Natural is expected to generate 1.81 times more return on investment than Brompton European. However, Global X is 1.81 times more volatile than Brompton European Dividend. It trades about 0.14 of its potential returns per unit of risk. Brompton European Dividend is currently generating about 0.0 per unit of risk. If you would invest 710.00 in Global X Natural on August 28, 2024 and sell it today you would earn a total of 59.00 from holding Global X Natural or generate 8.31% 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. Brompton European Dividend
Performance |
| Timeline |
| Global X Natural |
| Brompton European |
Global X and Brompton European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Brompton European
The main advantage of trading using opposite Global X and Brompton European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Brompton European 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 Brompton European will offset losses from the drop in Brompton European's long position.The idea behind Global X Natural and Brompton European Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Brompton European vs. Global Atomic Corp | Brompton European vs. enCore Energy Corp | Brompton European vs. Fission Uranium Corp | Brompton European vs. NexGen Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |