Correlation Between GLOBAL X and CI Enhanced

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

By analyzing existing cross correlation between GLOBAL X HIGH and CI Enhanced Short, you can compare the effects of market volatilities on GLOBAL X and CI Enhanced 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 CI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBAL X and CI Enhanced.

Diversification Opportunities for GLOBAL X and CI Enhanced

-0.31

Correlation Coefficient

GLOBAL X  CI Enhanced

Very good diversification

The 3 months correlation between GLOBAL and FSB is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GLOBAL X HIGH and CI Enhanced Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Enhanced Short 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 HIGH are associated (or correlated) with CI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Enhanced Short has no effect on the direction of GLOBAL X i.e., GLOBAL X and CI Enhanced go up and down completely randomly.

Pair Corralation between GLOBAL X and CI Enhanced

Assuming the 90 days trading horizon GLOBAL X is expected to generate 1.36 times less return on investment than CI Enhanced. But when comparing it to its historical volatility, GLOBAL X HIGH is 3.02 times less risky than CI Enhanced. It trades about 0.32 of its potential returns per unit of risk. CI Enhanced Short is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  855.00  in CI Enhanced Short on September 26, 2024 and sell it today you would earn a total of  109.00  from holding CI Enhanced Short or generate 12.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

GLOBAL X HIGH  vs.  CI Enhanced Short

GLOBAL X HIGH

Risk-Adjusted Performance

61 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBAL X HIGH are ranked lower than 61 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GLOBAL X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Enhanced Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Enhanced Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, CI Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GLOBAL X and CI Enhanced

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

The idea behind GLOBAL X HIGH and CI Enhanced Short 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..