Correlation Between First Asset and Global X
Can any of the company-specific risk be diversified away by investing in both First Asset 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 First Asset and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Energy and Global X NASDAQ 100, you can compare the effects of market volatilities on First Asset 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 First Asset with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and Global X.
Diversification Opportunities for First Asset and Global X
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Global is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Energy and Global X NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ and First Asset 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 First Asset Energy 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 NASDAQ has no effect on the direction of First Asset i.e., First Asset and Global X go up and down completely randomly.
Pair Corralation between First Asset and Global X
Assuming the 90 days trading horizon First Asset is expected to generate 1.6 times less return on investment than Global X. In addition to that, First Asset is 1.27 times more volatile than Global X NASDAQ 100. It trades about 0.07 of its total potential returns per unit of risk. Global X NASDAQ 100 is currently generating about 0.13 per unit of volatility. If you would invest 1,051 in Global X NASDAQ 100 on February 17, 2024 and sell it today you would earn a total of 122.00 from holding Global X NASDAQ 100 or generate 11.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Asset Energy vs. Global X NASDAQ 100
Performance |
Timeline |
First Asset Energy |
Global X NASDAQ |
First Asset and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Asset and Global X
The main advantage of trading using opposite First Asset and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset 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.First Asset vs. BMO Equal Weight | First Asset vs. BMO SPTSX Equal | First Asset vs. BMO Equal Weight | First Asset vs. BMO Equal Weight |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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