Correlation Between Global X and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both Global X and Scottish Mortgage 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 Scottish Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Uranium and Scottish Mortgage Investment, you can compare the effects of market volatilities on Global X and Scottish Mortgage 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 Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Scottish Mortgage.
Diversification Opportunities for Global X and Scottish Mortgage
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Scottish is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global X Uranium and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage 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 Uranium are associated (or correlated) with Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of Global X i.e., Global X and Scottish Mortgage go up and down completely randomly.
Pair Corralation between Global X and Scottish Mortgage
Assuming the 90 days trading horizon Global X is expected to generate 1.0 times less return on investment than Scottish Mortgage. In addition to that, Global X is 1.67 times more volatile than Scottish Mortgage Investment. It trades about 0.22 of its total potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.37 per unit of volatility. If you would invest 87,598 in Scottish Mortgage Investment on September 4, 2024 and sell it today you would earn a total of 8,382 from holding Scottish Mortgage Investment or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Uranium vs. Scottish Mortgage Investment
Performance |
| Timeline |
| Global X Uranium |
| Scottish Mortgage |
Global X and Scottish Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Scottish Mortgage
The main advantage of trading using opposite Global X and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.| Global X vs. Scottish Mortgage Investment | Global X vs. VinaCapital Vietnam Opportunity | Global X vs. Edinburgh Worldwide Investment | Global X vs. Baillie Gifford Growth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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