Correlation Between Supremex and Global X
Can any of the company-specific risk be diversified away by investing in both Supremex 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 Supremex and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supremex and Global X Active, you can compare the effects of market volatilities on Supremex 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 Supremex with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supremex and Global X.
Diversification Opportunities for Supremex and Global X
Good diversification
The 3 months correlation between Supremex and Global is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Supremex and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and Supremex 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 Supremex 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 Active has no effect on the direction of Supremex i.e., Supremex and Global X go up and down completely randomly.
Pair Corralation between Supremex and Global X
Assuming the 90 days trading horizon Supremex is expected to under-perform the Global X. In addition to that, Supremex is 4.07 times more volatile than Global X Active. It trades about -0.01 of its total potential returns per unit of risk. Global X Active is currently generating about 0.06 per unit of volatility. If you would invest 779.00 in Global X Active on September 2, 2024 and sell it today you would earn a total of 158.00 from holding Global X Active or generate 20.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Supremex vs. Global X Active
Performance |
| Timeline |
| Supremex |
| Global X Active |
Supremex and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supremex and Global X
The main advantage of trading using opposite Supremex and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex 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.| Supremex vs. K Bro Linen | Supremex vs. The Keg Royalties | Supremex vs. Pollard Banknote Limited | Supremex vs. SIR Royalty Income |
| Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income | Global X vs. BMO Aggregate Bond | Global X vs. iShares Canadian HYBrid |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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