Correlation Between CI WisdomTree and Global X
Can any of the company-specific risk be diversified away by investing in both CI WisdomTree and Global X 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 CI WisdomTree and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI WisdomTree Japan and Global X Natural, you can compare the effects of market volatilities on CI WisdomTree and Global X 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 CI WisdomTree with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI WisdomTree and Global X.
Diversification Opportunities for CI WisdomTree and Global X
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPN and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CI WisdomTree Japan and Global X Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Natural and CI WisdomTree 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 CI WisdomTree Japan are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Natural has no effect on the direction of CI WisdomTree i.e., CI WisdomTree and Global X go up and down completely randomly.
Pair Corralation between CI WisdomTree and Global X
Assuming the 90 days trading horizon CI WisdomTree Japan is expected to generate 0.82 times more return on investment than Global X. However, CI WisdomTree Japan is 1.21 times less risky than Global X. It trades about 0.0 of its potential returns per unit of risk. Global X Natural is currently generating about -0.03 per unit of risk. If you would invest 4,917 in CI WisdomTree Japan on September 2, 2024 and sell it today you would lose (89.00) from holding CI WisdomTree Japan or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI WisdomTree Japan vs. Global X Natural
Performance |
| Timeline |
| CI WisdomTree Japan |
| Global X Natural |
CI WisdomTree and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI WisdomTree and Global X
The main advantage of trading using opposite CI WisdomTree and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI WisdomTree position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| CI WisdomTree vs. NBI High Yield | CI WisdomTree vs. NBI Unconstrained Fixed | CI WisdomTree vs. Mackenzie Developed ex North | CI WisdomTree vs. BMO Short Term Bond |
| Global X vs. Global X Crude | Global X vs. Global X Silver | Global X vs. Global X Gold | Global X vs. Global X Active |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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