Correlation Between IShares Commodity and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Commodity 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 Commodity 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 Commodity Curve and Global X Disruptive, you can compare the effects of market volatilities on IShares Commodity 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 Commodity with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Commodity and Global X.
Diversification Opportunities for IShares Commodity and Global X
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Commodity Curve and Global X Disruptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Disruptive and IShares Commodity 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 Commodity Curve 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 Disruptive has no effect on the direction of IShares Commodity i.e., IShares Commodity and Global X go up and down completely randomly.
Pair Corralation between IShares Commodity and Global X
Given the investment horizon of 90 days iShares Commodity Curve is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, iShares Commodity Curve is 2.3 times less risky than Global X. The etf trades about -0.04 of its potential returns per unit of risk. The Global X Disruptive is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,506 in Global X Disruptive on January 11, 2025 and sell it today you would lose (129.00) from holding Global X Disruptive or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Commodity Curve vs. Global X Disruptive
Performance |
| Timeline |
| iShares Commodity Curve |
| Global X Disruptive |
IShares Commodity and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Commodity and Global X
The main advantage of trading using opposite IShares Commodity and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Commodity 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 Commodity vs. iShares Bloomberg Roll | IShares Commodity vs. USCF SummerHaven Dynamic | IShares Commodity vs. abrdn Bloomberg All | IShares Commodity vs. GraniteShares Bloomberg Commodity |
| Global X vs. VanEck Vectors ETF | Global X vs. Global X AgTech | Global X vs. Global X Clean | Global X vs. Global X Wind |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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