Correlation Between Harvest Equal and Global X

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

By analyzing existing cross correlation between Harvest Equal Weight and Global X 0 3, you can compare the effects of market volatilities on Harvest Equal 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 Harvest Equal with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Equal and Global X.

Diversification Opportunities for Harvest Equal and Global X

0.75

Correlation Coefficient

Harvest Equal  Global X

Poor diversification

The 3 months correlation between Harvest and Global is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Equal Weight and Global X 0 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 0 and Harvest Equal 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 Harvest Equal Weight 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 0 has no effect on the direction of Harvest Equal i.e., Harvest Equal and Global X go up and down completely randomly.

Pair Corralation between Harvest Equal and Global X

Assuming the 90 days trading horizon Harvest Equal Weight is expected to generate 31.91 times more return on investment than Global X. However, Harvest Equal is 31.91 times more volatile than Global X 0 3. It trades about 0.1 of its potential returns per unit of risk. Global X 0 3 is currently generating about 0.82 per unit of risk. If you would invest  1,728  in Harvest Equal Weight on September 5, 2024 and sell it today you would earn a total of  78.00  from holding Harvest Equal Weight or generate 4.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Harvest Equal Weight  vs.  Global X 0 3

Harvest Equal Weight

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Equal Weight are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Equal is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global X 0

Risk-Adjusted Performance

64 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Global X 0 3 are ranked lower than 64 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Global X is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harvest Equal and Global X

The main advantage of trading using opposite Harvest Equal and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Equal 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 Harvest Equal Weight and Global X 0 3 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 CEOs Directory module to screen CEOs from public companies around the world.