Correlation Between First Asset and Global X
Can any of the company-specific risk be diversified away by investing in both First Asset 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 First Asset and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Morningstar and Global X SPTSX, you can compare the effects of market volatilities on First Asset 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 First Asset with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and Global X.
Diversification Opportunities for First Asset and Global X
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Morningstar 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 First Asset 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 First Asset Morningstar 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 First Asset i.e., First Asset and Global X go up and down completely randomly.
Pair Corralation between First Asset and Global X
Assuming the 90 days trading horizon First Asset Morningstar is expected to under-perform the Global X. In addition to that, First Asset is 1.47 times more volatile than Global X SPTSX. It trades about -0.02 of its total potential returns per unit of risk. Global X SPTSX is currently generating about -0.02 per unit of volatility. If you would invest 6,677 in Global X SPTSX on December 3, 2024 and sell it today you would lose (76.00) from holding Global X SPTSX or give up 1.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
First Asset Morningstar vs. Global X SPTSX
Performance |
Timeline |
First Asset Morningstar |
Global X SPTSX |
First Asset and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Asset and Global X
The main advantage of trading using opposite First Asset and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset 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.First Asset vs. First Trust Indxx | First Asset vs. First Trust Senior | First Asset vs. First Trust AlphaDEX | First Asset vs. First Trust Indxx |
Global X vs. Global X SP | Global X vs. BMO SPTSX Capped | Global X vs. Vanguard FTSE Canada | Global X vs. iShares Core SPTSX |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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