Correlation Between Global X and TD Active
Can any of the company-specific risk be diversified away by investing in both Global X and TD Active 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 TD Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Robotics and TD Active Global, you can compare the effects of market volatilities on Global X and TD Active 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 TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and TD Active.
Diversification Opportunities for Global X and TD Active
Poor diversification
The 3 months correlation between Global and TGGR is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global X Robotics and TD Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Global 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 Robotics are associated (or correlated) with TD Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Active Global has no effect on the direction of Global X i.e., Global X and TD Active go up and down completely randomly.
Pair Corralation between Global X and TD Active
Assuming the 90 days trading horizon Global X Robotics is expected to generate 1.77 times more return on investment than TD Active. However, Global X is 1.77 times more volatile than TD Active Global. It trades about 0.03 of its potential returns per unit of risk. TD Active Global is currently generating about -0.13 per unit of risk. If you would invest 3,134 in Global X Robotics on November 27, 2024 and sell it today you would earn a total of 21.00 from holding Global X Robotics or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Robotics vs. TD Active Global
Performance |
| Timeline |
| Global X Robotics |
| TD Active Global |
Global X and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and TD Active
The main advantage of trading using opposite Global X and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, TD Active 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 TD Active will offset losses from the drop in TD Active's long position.| Global X vs. Evolve Cyber Security | Global X vs. Evolve Automobile Innovation | Global X vs. Global X Big | Global X vs. Evolve E Gaming Index |
| TD Active vs. TD Active Enhanced | TD Active vs. TD Active Global | TD Active vs. TD Active Global | TD Active vs. TD Active Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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