Correlation Between Global X and CI Galaxy

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

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

Diversification Opportunities for Global X and CI Galaxy

-0.56

Correlation Coefficient

Global X  CI Galaxy

Excellent diversification

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

Pair Corralation between Global X and CI Galaxy

Assuming the 90 days trading horizon Global X Semiconductor is expected to under-perform the CI Galaxy. But the etf apears to be less risky and, when comparing its historical volatility, Global X Semiconductor is 2.26 times less risky than CI Galaxy. The etf trades about -0.01 of its potential returns per unit of risk. The CI Galaxy Multi Crypto is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,206  in CI Galaxy Multi Crypto on October 7, 2024 and sell it today you would earn a total of  326.00  from holding CI Galaxy Multi Crypto or generate 27.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Global X Semiconductor  vs.  CI Galaxy Multi Crypto

Global X Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CI Galaxy Multi

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Galaxy Multi Crypto are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, CI Galaxy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and CI Galaxy

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

The idea behind Global X Semiconductor and CI Galaxy Multi Crypto 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.