Correlation Between Perpetual Credit and Global X
Can any of the company-specific risk be diversified away by investing in both Perpetual Credit 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 Perpetual Credit and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perpetual Credit Income and Global X SP, you can compare the effects of market volatilities on Perpetual Credit 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 Perpetual Credit with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Credit and Global X.
Diversification Opportunities for Perpetual Credit and Global X
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perpetual and Global is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and Perpetual Credit 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 Perpetual Credit Income 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 SP has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and Global X go up and down completely randomly.
Pair Corralation between Perpetual Credit and Global X
Assuming the 90 days trading horizon Perpetual Credit is expected to generate 3.23 times less return on investment than Global X. In addition to that, Perpetual Credit is 1.32 times more volatile than Global X SP. It trades about 0.06 of its total potential returns per unit of risk. Global X SP is currently generating about 0.26 per unit of volatility. If you would invest 1,000.00 in Global X SP on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Global X SP or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 10.02% |
| Values | Daily Returns |
Perpetual Credit Income vs. Global X SP
Performance |
| Timeline |
| Perpetual Credit Income |
| Global X SP |
Perpetual Credit and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perpetual Credit and Global X
The main advantage of trading using opposite Perpetual Credit and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perpetual Credit 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.| Perpetual Credit vs. Champion Iron | Perpetual Credit vs. iShares Global Healthcare | Perpetual Credit vs. Peel Mining | Perpetual Credit vs. Australian Dairy Farms |
| Global X vs. Betashares Asia Technology | Global X vs. CD Private Equity | Global X vs. BetaShares Australia 200 | Global X vs. Australian High Interest |
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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