Correlation Between CI Gold and Global X
Can any of the company-specific risk be diversified away by investing in both CI Gold 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 CI Gold and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Gold Bullion and Global X Silver, you can compare the effects of market volatilities on CI Gold 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 CI Gold with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Gold and Global X.
Diversification Opportunities for CI Gold and Global X
Very weak diversification
The 3 months correlation between VALT and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Bullion and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver and CI Gold 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 CI Gold Bullion 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 Silver has no effect on the direction of CI Gold i.e., CI Gold and Global X go up and down completely randomly.
Pair Corralation between CI Gold and Global X
Assuming the 90 days trading horizon CI Gold is expected to generate 1.56 times less return on investment than Global X. But when comparing it to its historical volatility, CI Gold Bullion is 2.27 times less risky than Global X. It trades about 0.28 of its potential returns per unit of risk. Global X Silver is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,313 in Global X Silver on November 3, 2024 and sell it today you would earn a total of 99.00 from holding Global X Silver or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Gold Bullion vs. Global X Silver
Performance |
| Timeline |
| CI Gold Bullion |
| Global X Silver |
CI Gold and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Gold and Global X
The main advantage of trading using opposite CI Gold and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold 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.| CI Gold vs. NBI High Yield | CI Gold vs. NBI Unconstrained Fixed | CI Gold vs. Mackenzie Developed ex North | CI Gold vs. BMO Short Term Bond |
| Global X vs. Global X Gold | Global X vs. Global X Natural | Global X vs. iShares Silver Bullion | Global X vs. BetaPro Silver 2x |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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