Correlation Between Global X and ANZ SP
Can any of the company-specific risk be diversified away by investing in both Global X and ANZ SP 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 ANZ SP 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 ANZ SP 500, you can compare the effects of market volatilities on Global X and ANZ SP 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 ANZ SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and ANZ SP.
Diversification Opportunities for Global X and ANZ SP
Very weak diversification
The 3 months correlation between Global and ANZ is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and ANZ SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ SP 500 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 ANZ SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ SP 500 has no effect on the direction of Global X i.e., Global X and ANZ SP go up and down completely randomly.
Pair Corralation between Global X and ANZ SP
Assuming the 90 days trading horizon Global X Hydrogen is expected to generate 3.11 times more return on investment than ANZ SP. However, Global X is 3.11 times more volatile than ANZ SP 500. It trades about 0.12 of its potential returns per unit of risk. ANZ SP 500 is currently generating about 0.04 per unit of risk. If you would invest 426.00 in Global X Hydrogen on October 27, 2024 and sell it today you would earn a total of 80.00 from holding Global X Hydrogen or generate 18.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Global X Hydrogen vs. ANZ SP 500
Performance |
Timeline |
Global X Hydrogen |
ANZ SP 500 |
Global X and ANZ SP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and ANZ SP
The main advantage of trading using opposite Global X and ANZ SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, ANZ SP 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 ANZ SP will offset losses from the drop in ANZ SP's long position.The idea behind Global X Hydrogen and ANZ SP 500 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.ANZ SP vs. ANZ SPASX 300 | ANZ SP vs. iShares MSCI Emerging | ANZ SP vs. Global X Hydrogen | ANZ SP vs. Janus Henderson Sustainable |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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