Correlation Between Global X and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both Global X and SPDR Bloomberg 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 SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Cybersecurity and SPDR Bloomberg Convertible, you can compare the effects of market volatilities on Global X and SPDR Bloomberg 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 SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SPDR Bloomberg.
Diversification Opportunities for Global X and SPDR Bloomberg
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and SPDR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global X Cybersecurity and SPDR Bloomberg Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Conve 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 Cybersecurity are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Conve has no effect on the direction of Global X i.e., Global X and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between Global X and SPDR Bloomberg
Considering the 90-day investment horizon Global X Cybersecurity is expected to generate 2.76 times more return on investment than SPDR Bloomberg. However, Global X is 2.76 times more volatile than SPDR Bloomberg Convertible. It trades about 0.06 of its potential returns per unit of risk. SPDR Bloomberg Convertible is currently generating about 0.09 per unit of risk. If you would invest 2,237 in Global X Cybersecurity on August 26, 2024 and sell it today you would earn a total of 1,115 from holding Global X Cybersecurity or generate 49.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Cybersecurity vs. SPDR Bloomberg Convertible
Performance |
| Timeline |
| Global X Cybersecurity |
| SPDR Bloomberg Conve |
Global X and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SPDR Bloomberg
The main advantage of trading using opposite Global X and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SPDR Bloomberg 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 SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| Global X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. Invesco Dynamic Large | Global X vs. HUMANA INC |
| SPDR Bloomberg vs. iShares Convertible Bond | SPDR Bloomberg vs. Invesco Senior Loan | SPDR Bloomberg vs. SPDR Bloomberg Short | SPDR Bloomberg vs. Invesco Emerging Markets |
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 Stocks Directory module to find actively traded stocks across global markets.
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