Correlation Between IShares Core and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Moderate and Global X Guru, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Global X.
Diversification Opportunities for IShares Core and Global X
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Global is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Moderate and Global X Guru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Guru and IShares Core 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 iShares Core Moderate 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 Guru has no effect on the direction of IShares Core i.e., IShares Core and Global X go up and down completely randomly.
Pair Corralation between IShares Core and Global X
Considering the 90-day investment horizon IShares Core is expected to generate 2.32 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Core Moderate is 2.18 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X Guru is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,475 in Global X Guru on August 30, 2024 and sell it today you would earn a total of 1,820 from holding Global X Guru or generate 52.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Moderate vs. Global X Guru
Performance |
| Timeline |
| iShares Core Moderate |
| Global X Guru |
IShares Core and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Global X
The main advantage of trading using opposite IShares Core and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. NEOS ETF Trust | IShares Core vs. First Trust Multi Asset | IShares Core vs. Amplify High Income | IShares Core vs. Global X Russell |
| Global X vs. iShares MSCI USA | Global X vs. iShares MSCI USA | Global X vs. iShares MSCI USA | Global X vs. iShares Expanded Tech Software |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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