Correlation Between Global X and Harvest Brand
Can any of the company-specific risk be diversified away by investing in both Global X and Harvest Brand 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 Harvest Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SPTSX and Harvest Brand Leaders, you can compare the effects of market volatilities on Global X and Harvest Brand 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 Harvest Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Harvest Brand.
Diversification Opportunities for Global X and Harvest Brand
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Harvest is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global X SPTSX and Harvest Brand Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Brand Leaders 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 SPTSX are associated (or correlated) with Harvest Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Brand Leaders has no effect on the direction of Global X i.e., Global X and Harvest Brand go up and down completely randomly.
Pair Corralation between Global X and Harvest Brand
Assuming the 90 days trading horizon Global X SPTSX is expected to generate 3.95 times more return on investment than Harvest Brand. However, Global X is 3.95 times more volatile than Harvest Brand Leaders. It trades about 0.01 of its potential returns per unit of risk. Harvest Brand Leaders is currently generating about 0.0 per unit of risk. If you would invest 3,625 in Global X SPTSX on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Global X SPTSX or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SPTSX vs. Harvest Brand Leaders
Performance |
| Timeline |
| Global X SPTSX |
| Harvest Brand Leaders |
Global X and Harvest Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Harvest Brand
The main advantage of trading using opposite Global X and Harvest Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Harvest Brand 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 Harvest Brand will offset losses from the drop in Harvest Brand's long position.| Global X vs. Harvest Brand Leaders | Global X vs. Harvest Equal Weight | Global X vs. First Asset Energy | Global X vs. Harvest Healthcare Leaders |
| Harvest Brand vs. iShares Core SP | Harvest Brand vs. iShares SPTSX Capped | Harvest Brand vs. BMO NASDAQ 100 | Harvest Brand vs. Vanguard SP 500 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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