Correlation Between Global X and X Square
Can any of the company-specific risk be diversified away by investing in both Global X and X Square 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 X Square 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 X Square Balanced, you can compare the effects of market volatilities on Global X and X Square 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 X Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and X Square.
Diversification Opportunities for Global X and X Square
Almost no diversification
The 3 months correlation between Global and SQBFX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X Cybersecurity and X Square Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Square Balanced 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 X Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Square Balanced has no effect on the direction of Global X i.e., Global X and X Square go up and down completely randomly.
Pair Corralation between Global X and X Square
Considering the 90-day investment horizon Global X Cybersecurity is expected to generate 2.1 times more return on investment than X Square. However, Global X is 2.1 times more volatile than X Square Balanced. It trades about 0.12 of its potential returns per unit of risk. X Square Balanced is currently generating about 0.1 per unit of risk. If you would invest 3,340 in Global X Cybersecurity on September 12, 2024 and sell it today you would earn a total of 89.00 from holding Global X Cybersecurity or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Cybersecurity vs. X Square Balanced
Performance |
| Timeline |
| Global X Cybersecurity |
| X Square Balanced |
Global X and X Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and X Square
The main advantage of trading using opposite Global X and X Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, X Square 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 X Square will offset losses from the drop in X Square's long position.| Global X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. SCOR PK | Global X vs. Morningstar Unconstrained Allocation |
| X Square vs. ALPSSmith Balanced Opportunity | X Square vs. ALPSSmith Balanced Opportunity | X Square vs. ALPSSmith Balanced Opportunity | X Square vs. Aquagold International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |