Correlation Between Guinness Atkinson and Global X

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

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

Diversification Opportunities for Guinness Atkinson and Global X

0.73

Correlation Coefficient

Guinness Atkinson  Global X

Poor diversification

The 3 months correlation between Guinness and Global is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Asset and Global X Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Thematic and Guinness Atkinson 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 Guinness Atkinson Asset 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 Thematic has no effect on the direction of Guinness Atkinson i.e., Guinness Atkinson and Global X go up and down completely randomly.

Pair Corralation between Guinness Atkinson and Global X

Given the investment horizon of 90 days Guinness Atkinson Asset is expected to generate 0.6 times more return on investment than Global X. However, Guinness Atkinson Asset is 1.67 times less risky than Global X. It trades about 0.18 of its potential returns per unit of risk. Global X Thematic is currently generating about 0.07 per unit of risk. If you would invest  1,462  in Guinness Atkinson Asset on September 16, 2024 and sell it today you would earn a total of  76.00  from holding Guinness Atkinson Asset or generate 5.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	55.38%
Values	Daily Returns

Guinness Atkinson Asset  vs.  Global X Thematic

Guinness Atkinson Asset

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Guinness Atkinson Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, Guinness Atkinson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Thematic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Thematic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Global X is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Guinness Atkinson and Global X

The main advantage of trading using opposite Guinness Atkinson and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guinness Atkinson 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 Guinness Atkinson Asset and Global X Thematic 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.