Correlation Between Patria Investments and Global X

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

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

Diversification Opportunities for Patria Investments and Global X

0.57

Correlation Coefficient

Patria Investments  Global X

Very weak diversification

The 3 months correlation between Patria and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments Limited and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Patria Investments 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 Patria Investments Limited 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 Funds has no effect on the direction of Patria Investments i.e., Patria Investments and Global X go up and down completely randomly.

Pair Corralation between Patria Investments and Global X

Assuming the 90 days trading horizon Patria Investments is expected to generate 1.34 times less return on investment than Global X. In addition to that, Patria Investments is 1.0 times more volatile than Global X Funds. It trades about 0.1 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.13 per unit of volatility. If you would invest  4,716  in Global X Funds on October 7, 2024 and sell it today you would earn a total of  389.00  from holding Global X Funds or generate 8.25% return on investment over 90 days.

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

Patria Investments Limited  vs.  Global X Funds

Patria Investments

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Patria Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Global X Funds

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global X sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patria Investments and Global X

The main advantage of trading using opposite Patria Investments and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Investments 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 Patria Investments Limited and Global X Funds 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.