Correlation Between Global X and CD Private
Can any of the company-specific risk be diversified away by investing in both Global X and CD Private 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 CD Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X USD and CD Private Equity, you can compare the effects of market volatilities on Global X and CD Private 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 CD Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and CD Private.
Diversification Opportunities for Global X and CD Private
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and CD3 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Global X USD and CD Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Private Equity 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 USD are associated (or correlated) with CD Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Private Equity has no effect on the direction of Global X i.e., Global X and CD Private go up and down completely randomly.
Pair Corralation between Global X and CD Private
Assuming the 90 days trading horizon Global X is expected to generate 1.63 times less return on investment than CD Private. But when comparing it to its historical volatility, Global X USD is 1.06 times less risky than CD Private. It trades about 0.02 of its potential returns per unit of risk. CD Private Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 109.00 in CD Private Equity on August 30, 2024 and sell it today you would earn a total of 21.00 from holding CD Private Equity or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.89% |
| Values | Daily Returns |
Global X USD vs. CD Private Equity
Performance |
| Timeline |
| Global X USD |
| CD Private Equity |
Global X and CD Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and CD Private
The main advantage of trading using opposite Global X and CD Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, CD Private 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 CD Private will offset losses from the drop in CD Private's long position.| Global X vs. BetaShares Geared Australian | Global X vs. BetaShares Global Robotics | Global X vs. iShares China LargeCap | Global X vs. Russell Australian Government |
| CD Private vs. iShares MSCI Emerging | CD Private vs. Global X Hydrogen | CD Private vs. Janus Henderson Sustainable | CD Private vs. JPMorgan Equity Premium |
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 Stocks Directory module to find actively traded stocks across global markets.
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