Correlation Between Global X and IShares Edge
Can any of the company-specific risk be diversified away by investing in both Global X and IShares Edge 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 IShares Edge 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 iShares Edge Investment, you can compare the effects of market volatilities on Global X and IShares Edge 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 IShares Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Edge.
Diversification Opportunities for Global X and IShares Edge
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and IShares is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and iShares Edge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Edge Investment 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 IShares Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Edge Investment has no effect on the direction of Global X i.e., Global X and IShares Edge go up and down completely randomly.
Pair Corralation between Global X and IShares Edge
Given the investment horizon of 90 days Global X is expected to generate 3.67 times less return on investment than IShares Edge. But when comparing it to its historical volatility, Global X Funds is 25.3 times less risky than IShares Edge. It trades about 1.08 of its potential returns per unit of risk. iShares Edge Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,495 in iShares Edge Investment on September 1, 2024 and sell it today you would earn a total of 64.00 from holding iShares Edge Investment or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global X Funds vs. iShares Edge Investment
Performance |
| Timeline |
| Global X Funds |
| iShares Edge Investment |
Global X and IShares Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares Edge
The main advantage of trading using opposite Global X and IShares Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Edge 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 IShares Edge will offset losses from the drop in IShares Edge's long position.| Global X vs. iShares Interest Rate | Global X vs. iShares Interest Rate | Global X vs. iShares Edge Investment | Global X vs. iShares Inflation Hedged |
| IShares Edge vs. iShares ESG USD | IShares Edge vs. FlexShares Disciplined Duration | IShares Edge vs. iShares ESG 1 5 | IShares Edge vs. First Trust Emerging |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |