Correlation Between Global Dividend and Clough Global

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

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

Diversification Opportunities for Global Dividend and Clough Global

0.7

Correlation Coefficient

Global Dividend  Clough Global

Poor diversification

The 3 months correlation between Global and Clough is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global Dividend and and Clough Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Opport and Global Dividend 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 Dividend and are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Opport has no effect on the direction of Global Dividend i.e., Global Dividend and Clough Global go up and down completely randomly.

Pair Corralation between Global Dividend and Clough Global

Assuming the 90 days horizon Global Dividend and is expected to under-perform the Clough Global. But the etf apears to be less risky and, when comparing its historical volatility, Global Dividend and is 1.24 times less risky than Clough Global. The etf trades about -0.16 of its potential returns per unit of risk. The Clough Global Opportunities is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  622.00  in Clough Global Opportunities on September 15, 2024 and sell it today you would lose (5.00) from holding Clough Global Opportunities or give up 0.8% of portfolio value over 90 days.

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

Global Dividend and  vs.  Clough Global Opportunities

Global Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Dividend and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Global Dividend is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Clough Global Opport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clough Global Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Clough Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Dividend and Clough Global

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

The idea behind Global Dividend and and Clough Global Opportunities 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.