Correlation Between SHP ETF and Global X
Can any of the company-specific risk be diversified away by investing in both SHP ETF 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 SHP ETF and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHP ETF Trust and Global X SP, you can compare the effects of market volatilities on SHP ETF 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 SHP ETF with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHP ETF and Global X.
Diversification Opportunities for SHP ETF and Global X
Almost no diversification
The 3 months correlation between SHP and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SHP ETF Trust and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and SHP ETF 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 SHP ETF Trust 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 SP has no effect on the direction of SHP ETF i.e., SHP ETF and Global X go up and down completely randomly.
Pair Corralation between SHP ETF and Global X
Given the investment horizon of 90 days SHP ETF is expected to generate 4.87 times less return on investment than Global X. But when comparing it to its historical volatility, SHP ETF Trust is 21.7 times less risky than Global X. It trades about 0.85 of its potential returns per unit of risk. Global X SP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,211 in Global X SP on August 29, 2024 and sell it today you would earn a total of 91.00 from holding Global X SP or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHP ETF Trust vs. Global X SP
Performance |
| Timeline |
| SHP ETF Trust |
| Global X SP |
SHP ETF and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHP ETF and Global X
The main advantage of trading using opposite SHP ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHP ETF 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.| SHP ETF vs. SHP ETF Trust | SHP ETF vs. SHP ETF Trust | SHP ETF vs. iShares Trust | SHP ETF vs. VanEck ETF Trust |
| Global X vs. Global X Nasdaq | Global X vs. Global X SP | Global X vs. Global X Russell | Global X vs. Global X SP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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