Correlation Between Global X and Wix
Can any of the company-specific risk be diversified away by investing in both Global X and Wix 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 X and Wix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Wix, you can compare the effects of market volatilities on Global X and Wix 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 X with a short position of Wix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Wix.
Diversification Opportunities for Global X and Wix
Very poor diversification
The 3 months correlation between Global and Wix is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Wix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wix and Global X 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 X Funds are associated (or correlated) with Wix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wix has no effect on the direction of Global X i.e., Global X and Wix go up and down completely randomly.
Pair Corralation between Global X and Wix
Assuming the 90 days trading horizon Global X is expected to generate 5.59 times less return on investment than Wix. But when comparing it to its historical volatility, Global X Funds is 1.73 times less risky than Wix. It trades about 0.05 of its potential returns per unit of risk. Wix is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,236 in Wix on October 22, 2024 and sell it today you would earn a total of 863.00 from holding Wix or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.5% |
| Values | Daily Returns |
Global X Funds vs. Wix
Performance |
| Timeline |
| Global X Funds |
| Wix |
Global X and Wix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Wix
The main advantage of trading using opposite Global X and Wix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Wix 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 Wix will offset losses from the drop in Wix's long position.| Global X vs. Waste Management | Global X vs. Warner Music Group | Global X vs. Westinghouse Air Brake | Global X vs. G2D Investments |
| Wix vs. Mangels Industrial SA | Wix vs. Mitsubishi UFJ Financial | Wix vs. Capital One Financial | Wix vs. STAG Industrial, |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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