Correlation Between CI Gold and Global X

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

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

Diversification Opportunities for CI Gold and Global X

0.18

Correlation Coefficient

CI Gold  Global X

Average diversification

The 3 months correlation between CGXF and Global is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Giants and Global X Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Enhanced and CI Gold 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 CI Gold Giants 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 Enhanced has no effect on the direction of CI Gold i.e., CI Gold and Global X go up and down completely randomly.

Pair Corralation between CI Gold and Global X

Assuming the 90 days trading horizon CI Gold is expected to generate 1.17 times less return on investment than Global X. In addition to that, CI Gold is 4.15 times more volatile than Global X Enhanced. It trades about 0.07 of its total potential returns per unit of risk. Global X Enhanced is currently generating about 0.35 per unit of volatility. If you would invest  1,816  in Global X Enhanced on September 4, 2024 and sell it today you would earn a total of  178.00  from holding Global X Enhanced or generate 9.8% return on investment over 90 days.

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

CI Gold Giants  vs.  Global X Enhanced

CI Gold Giants

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Giants are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Enhanced

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Enhanced are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CI Gold and Global X

The main advantage of trading using opposite CI Gold and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold 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 CI Gold Giants and Global X Enhanced 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.