Correlation Between Global X and CD Private

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

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

Diversification Opportunities for Global X and CD Private

-0.22

Correlation Coefficient

Global X  CD Private

Very good diversification

The 3 months correlation between Global and CD3 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and CD Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Private Equity 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 Hydrogen are associated (or correlated) with CD Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Private Equity has no effect on the direction of Global X i.e., Global X and CD Private go up and down completely randomly.

Pair Corralation between Global X and CD Private

Assuming the 90 days trading horizon Global X Hydrogen is expected to under-perform the CD Private. But the etf apears to be less risky and, when comparing its historical volatility, Global X Hydrogen is 1.01 times less risky than CD Private. The etf trades about -0.09 of its potential returns per unit of risk. The CD Private Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  115.00  in CD Private Equity on December 29, 2024 and sell it today you would earn a total of  4.00  from holding CD Private Equity or generate 3.48% return on investment over 90 days.

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

Global X Hydrogen  vs.  CD Private Equity

Global X Hydrogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Hydrogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

CD Private Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CD Private Equity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CD Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global X and CD Private

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

The idea behind Global X Hydrogen and CD Private Equity 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.