Correlation Between Global X and Airlie Australian

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

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

Diversification Opportunities for Global X and Airlie Australian

0.73

Correlation Coefficient

Global X  Airlie Australian

Poor diversification

The 3 months correlation between Global and Airlie is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and Airlie Australian Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airlie Australian Share and Global X 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 Global X Hydrogen are associated (or correlated) with Airlie Australian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airlie Australian Share has no effect on the direction of Global X i.e., Global X and Airlie Australian go up and down completely randomly.

Pair Corralation between Global X and Airlie Australian

Assuming the 90 days trading horizon Global X Hydrogen is expected to generate 3.55 times more return on investment than Airlie Australian. However, Global X is 3.55 times more volatile than Airlie Australian Share. It trades about 0.11 of its potential returns per unit of risk. Airlie Australian Share is currently generating about 0.05 per unit of risk. If you would invest  438.00  in Global X Hydrogen on September 14, 2024 and sell it today you would earn a total of  66.00  from holding Global X Hydrogen or generate 15.07% return on investment over 90 days.

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

Global X Hydrogen  vs.  Airlie Australian Share

Global X Hydrogen

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Hydrogen are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global X unveiled solid returns over the last few months and may actually be approaching a breakup point.

Airlie Australian Share

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airlie Australian Share are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Airlie Australian is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global X and Airlie Australian

The main advantage of trading using opposite Global X and Airlie Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Airlie Australian 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 Airlie Australian will offset losses from the drop in Airlie Australian's long position.

The idea behind Global X Hydrogen and Airlie Australian Share 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.