Correlation Between CI Galaxy and GLOBAL X

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

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

Diversification Opportunities for CI Galaxy and GLOBAL X

0.91

Correlation Coefficient

CI Galaxy  GLOBAL X

Almost no diversification

The 3 months correlation between CMCX-B and GLOBAL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI Galaxy Multi Crypto and GLOBAL X HIGH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL X HIGH and CI Galaxy 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 CI Galaxy Multi Crypto 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 HIGH has no effect on the direction of CI Galaxy i.e., CI Galaxy and GLOBAL X go up and down completely randomly.

Pair Corralation between CI Galaxy and GLOBAL X

Assuming the 90 days trading horizon CI Galaxy Multi Crypto is expected to generate 155.74 times more return on investment than GLOBAL X. However, CI Galaxy is 155.74 times more volatile than GLOBAL X HIGH. It trades about 0.13 of its potential returns per unit of risk. GLOBAL X HIGH is currently generating about 0.65 per unit of risk. If you would invest  1,514  in CI Galaxy Multi Crypto on September 22, 2024 and sell it today you would earn a total of  111.00  from holding CI Galaxy Multi Crypto or generate 7.33% return on investment over 90 days.

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

CI Galaxy Multi Crypto  vs.  GLOBAL X HIGH

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.

GLOBAL X HIGH

Risk-Adjusted Performance

59 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBAL X HIGH are ranked lower than 59 (%) 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.

Pair Trading with CI Galaxy and GLOBAL X

The main advantage of trading using opposite CI Galaxy and GLOBAL X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Galaxy 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 CI Galaxy Multi Crypto and GLOBAL X HIGH 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.