Correlation Between Global X and TD Global

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

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

Diversification Opportunities for Global X and TD Global

-0.47

Correlation Coefficient

Global X  TD Global

Very good diversification

The 3 months correlation between Global and TEC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global X Marijuana and TD Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Global Technology 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 Marijuana are associated (or correlated) with TD Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Global Technology has no effect on the direction of Global X i.e., Global X and TD Global go up and down completely randomly.

Pair Corralation between Global X and TD Global

Assuming the 90 days trading horizon Global X Marijuana is expected to under-perform the TD Global. In addition to that, Global X is 1.17 times more volatile than TD Global Technology. It trades about -0.34 of its total potential returns per unit of risk. TD Global Technology is currently generating about 0.32 per unit of volatility. If you would invest  4,342  in TD Global Technology on September 23, 2024 and sell it today you would earn a total of  321.00  from holding TD Global Technology or generate 7.39% return on investment over 90 days.

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

Global X Marijuana  vs.  TD Global Technology

Global X Marijuana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Marijuana 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.

TD Global Technology

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Global Technology are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, TD Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and TD Global

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

The idea behind Global X Marijuana and TD Global Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.