Correlation Between Volatility Shares and Global X
Can any of the company-specific risk be diversified away by investing in both Volatility Shares 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 Volatility Shares and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and Global X Funds, you can compare the effects of market volatilities on Volatility Shares 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 Volatility Shares with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Global X.
Diversification Opportunities for Volatility Shares and Global X
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Volatility and Global is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Volatility Shares 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 Volatility Shares Trust 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 Funds has no effect on the direction of Volatility Shares i.e., Volatility Shares and Global X go up and down completely randomly.
Pair Corralation between Volatility Shares and Global X
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 7.02 times more return on investment than Global X. However, Volatility Shares is 7.02 times more volatile than Global X Funds. It trades about 0.09 of its potential returns per unit of risk. Global X Funds is currently generating about 0.02 per unit of risk. If you would invest 1,334 in Volatility Shares Trust on October 20, 2024 and sell it today you would earn a total of 5,058 from holding Volatility Shares Trust or generate 379.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.13% |
| Values | Daily Returns |
Volatility Shares Trust vs. Global X Funds
Performance |
| Timeline |
| Volatility Shares Trust |
| Global X Funds |
Volatility Shares and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and Global X
The main advantage of trading using opposite Volatility Shares and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares 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.| Volatility Shares vs. ProShares Trust | Volatility Shares vs. iShares Ethereum Trust | Volatility Shares vs. ProShares Trust | Volatility Shares vs. Grayscale Ethereum Trust |
| Global X vs. iShares Dividend and | Global X vs. Martin Currie Sustainable | Global X vs. VictoryShares THB Mid | Global X vs. Mast Global Battery |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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