Correlation Between ValOre Metals and Global X

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

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

Diversification Opportunities for ValOre Metals and Global X

0.29

Correlation Coefficient

ValOre Metals  Global X

Modest diversification

The 3 months correlation between ValOre and Global is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ValOre Metals Corp and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and ValOre Metals 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 ValOre Metals Corp 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 Active has no effect on the direction of ValOre Metals i.e., ValOre Metals and Global X go up and down completely randomly.

Pair Corralation between ValOre Metals and Global X

Given the investment horizon of 90 days ValOre Metals Corp is expected to under-perform the Global X. In addition to that, ValOre Metals is 12.75 times more volatile than Global X Active. It trades about -0.21 of its total potential returns per unit of risk. Global X Active is currently generating about 0.14 per unit of volatility. If you would invest  927.00  in Global X Active on August 31, 2024 and sell it today you would earn a total of  13.00  from holding Global X Active or generate 1.4% return on investment over 90 days.

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

ValOre Metals Corp  vs.  Global X Active

ValOre Metals Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ValOre Metals Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ValOre Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Global X Active

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Active are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ValOre Metals and Global X

The main advantage of trading using opposite ValOre Metals and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ValOre Metals 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 ValOre Metals Corp and Global X Active 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.