Correlation Between Global X and THCX

Can any of the company-specific risk be diversified away by investing in both Global X and THCX 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 THCX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X Robotics and THCX, you can compare the effects of market volatilities on Global X and THCX 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 THCX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and THCX.

Diversification Opportunities for Global X and THCX

-0.56

Correlation Coefficient

Global X  THCX

Excellent diversification

The 3 months correlation between Global and THCX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global X Robotics and THCX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THCX 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 Robotics are associated (or correlated) with THCX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THCX has no effect on the direction of Global X i.e., Global X and THCX go up and down completely randomly.

Pair Corralation between Global X and THCX

If you would invest  3,052  in Global X Robotics on September 16, 2024 and sell it today you would earn a total of  250.00  from holding Global X Robotics or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Global X Robotics  vs.  THCX

Global X Robotics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Robotics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

THCX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days THCX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, THCX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global X and THCX

The main advantage of trading using opposite Global X and THCX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, THCX 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 THCX will offset losses from the drop in THCX's long position.

The idea behind Global X Robotics and THCX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.