Correlation Between Global X and Brinsmere
Can any of the company-specific risk be diversified away by investing in both Global X and Brinsmere 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 Brinsmere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X NASDAQ and The Brinsmere, you can compare the effects of market volatilities on Global X and Brinsmere 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 Brinsmere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Brinsmere.
Diversification Opportunities for Global X and Brinsmere
Poor diversification
The 3 months correlation between Global and Brinsmere is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global X NASDAQ and The Brinsmere in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinsmere 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 NASDAQ are associated (or correlated) with Brinsmere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinsmere has no effect on the direction of Global X i.e., Global X and Brinsmere go up and down completely randomly.
Pair Corralation between Global X and Brinsmere
Given the investment horizon of 90 days Global X NASDAQ is expected to generate 2.15 times more return on investment than Brinsmere. However, Global X is 2.15 times more volatile than The Brinsmere. It trades about 0.0 of its potential returns per unit of risk. The Brinsmere is currently generating about -0.06 per unit of risk. If you would invest 1,702 in Global X NASDAQ on December 25, 2024 and sell it today you would lose (9.00) from holding Global X NASDAQ or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X NASDAQ vs. The Brinsmere
Performance |
| Timeline |
| Global X NASDAQ |
| Brinsmere |
Global X and Brinsmere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Brinsmere
The main advantage of trading using opposite Global X and Brinsmere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Brinsmere 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 Brinsmere will offset losses from the drop in Brinsmere's long position.| Global X vs. Global X Russell | Global X vs. JPMorgan Equity Premium | Global X vs. Global X SP | Global X vs. NEOS ETF Trust |
| Brinsmere vs. Strategy Shares | Brinsmere vs. Freedom Day Dividend | Brinsmere vs. Franklin Templeton ETF | Brinsmere vs. iShares MSCI China |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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