Correlation Between Global X and Formidable ETF
Can any of the company-specific risk be diversified away by investing in both Global X and Formidable ETF 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 Formidable ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X CleanTech and Formidable ETF, you can compare the effects of market volatilities on Global X and Formidable ETF 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 Formidable ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Formidable ETF.
Diversification Opportunities for Global X and Formidable ETF
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Formidable is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X CleanTech and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF 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 CleanTech are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of Global X i.e., Global X and Formidable ETF go up and down completely randomly.
Pair Corralation between Global X and Formidable ETF
Given the investment horizon of 90 days Global X CleanTech is expected to under-perform the Formidable ETF. In addition to that, Global X is 2.29 times more volatile than Formidable ETF. It trades about -0.05 of its total potential returns per unit of risk. Formidable ETF is currently generating about 0.02 per unit of volatility. If you would invest 2,135 in Formidable ETF on September 15, 2024 and sell it today you would earn a total of 69.00 from holding Formidable ETF or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X CleanTech vs. Formidable ETF
Performance |
| Timeline |
| Global X CleanTech |
| Formidable ETF |
Global X and Formidable ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Formidable ETF
The main advantage of trading using opposite Global X and Formidable ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Formidable ETF 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 Formidable ETF will offset losses from the drop in Formidable ETF's long position.| Global X vs. Global X Telemedicine | Global X vs. ALPS Clean Energy | Global X vs. Global X Renewable | Global X vs. SPDR Kensho Clean |
| Formidable ETF vs. Horizon Kinetics Inflation | Formidable ETF vs. Invesco Global Clean | Formidable ETF vs. Virtus Real Asset | Formidable ETF vs. Global X CleanTech |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |