Correlation Between Vanguard Canadian and Global X
Can any of the company-specific risk be diversified away by investing in both Vanguard Canadian 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 Vanguard Canadian and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Canadian Long Term and Global X NASDAQ 100, you can compare the effects of market volatilities on Vanguard Canadian 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 Vanguard Canadian with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Canadian and Global X.
Diversification Opportunities for Vanguard Canadian and Global X
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Canadian Long Term and Global X NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ and Vanguard Canadian 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 Vanguard Canadian Long Term 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 NASDAQ has no effect on the direction of Vanguard Canadian i.e., Vanguard Canadian and Global X go up and down completely randomly.
Pair Corralation between Vanguard Canadian and Global X
Assuming the 90 days trading horizon Vanguard Canadian is expected to generate 6.03 times less return on investment than Global X. But when comparing it to its historical volatility, Vanguard Canadian Long Term is 1.04 times less risky than Global X. It trades about 0.02 of its potential returns per unit of risk. Global X NASDAQ 100 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 773.00 in Global X NASDAQ 100 on September 2, 2024 and sell it today you would earn a total of 506.00 from holding Global X NASDAQ 100 or generate 65.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Canadian Long Term vs. Global X NASDAQ 100
Performance |
| Timeline |
| Vanguard Canadian Long |
| Global X NASDAQ |
Vanguard Canadian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Canadian and Global X
The main advantage of trading using opposite Vanguard Canadian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Canadian 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.| Vanguard Canadian vs. Vanguard Canadian Government | Vanguard Canadian vs. Vanguard Canadian Corporate | Vanguard Canadian vs. Vanguard Canadian Short | Vanguard Canadian vs. Vanguard Canadian Short Term |
| Global X vs. Global X Canadian | Global X vs. Global X Gold | Global X vs. Real Estate E Commerce | Global X vs. Global X SPTSX |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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