Correlation Between Cornerstone Strategic and Global X

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

By analyzing existing cross correlation between Cornerstone Strategic Value and Global X SP, you can compare the effects of market volatilities on Cornerstone Strategic 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 Cornerstone Strategic with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Global X.

Diversification Opportunities for Cornerstone Strategic and Global X

0.71

Correlation Coefficient

Cornerstone Strategic  Global X

Poor diversification

The 3 months correlation between Cornerstone and Global is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and Cornerstone Strategic 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 Cornerstone Strategic Value 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 SP has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Global X go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Global X

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 3.3 times more return on investment than Global X. However, Cornerstone Strategic is 3.3 times more volatile than Global X SP. It trades about 0.16 of its potential returns per unit of risk. Global X SP is currently generating about 0.25 per unit of risk. If you would invest  765.00  in Cornerstone Strategic Value on October 24, 2024 and sell it today you would earn a total of  112.00  from holding Cornerstone Strategic Value or generate 14.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cornerstone Strategic Value  vs.  Global X SP

Cornerstone Strategic

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Global X SP

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SP are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cornerstone Strategic and Global X

The main advantage of trading using opposite Cornerstone Strategic and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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.

The idea behind Cornerstone Strategic Value and Global X SP 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.