Correlation Between BetaPro Canadian and Global X

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

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

Diversification Opportunities for BetaPro Canadian and Global X

-0.33

Correlation Coefficient

BetaPro Canadian  Global X

Very good diversification

The 3 months correlation between BetaPro and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX and BetaPro Canadian 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 BetaPro Canadian Gold 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 SPTSX has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and Global X go up and down completely randomly.

Pair Corralation between BetaPro Canadian and Global X

Assuming the 90 days trading horizon BetaPro Canadian Gold is expected to under-perform the Global X. In addition to that, BetaPro Canadian is 7.15 times more volatile than Global X SPTSX. It trades about -0.14 of its total potential returns per unit of risk. Global X SPTSX is currently generating about 0.0 per unit of volatility. If you would invest  8,375  in Global X SPTSX on September 22, 2024 and sell it today you would lose (3.00) from holding Global X SPTSX or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

BetaPro Canadian Gold  vs.  Global X SPTSX

BetaPro Canadian Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro Canadian Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Global X SPTSX

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SPTSX are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BetaPro Canadian and Global X

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

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.