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 Bullion and Global X Gold, 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

0.99

Correlation Coefficient

CI Gold  Global X

No risk reduction

The 3 months correlation between VALT and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Bullion and Global X Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Gold 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 Bullion 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 Gold 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 Bullion is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, CI Gold Bullion is 1.01 times less risky than Global X. The etf trades about -0.02 of its potential returns per unit of risk. The Global X Gold is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,067  in Global X Gold on September 27, 2024 and sell it today you would lose (34.00) from holding Global X Gold or give up 1.64% of portfolio value over 90 days.

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

CI Gold Bullion  vs.  Global X Gold

CI Gold Bullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Gold Bullion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CI Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global X Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental 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 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 Bullion and Global X Gold 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 Global Correlations module to find global opportunities by holding instruments from different markets.