Correlation Between SmartETFs Dividend and Global X
Can any of the company-specific risk be diversified away by investing in both SmartETFs Dividend 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 SmartETFs Dividend and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartETFs Dividend Builder and Global X Funds, you can compare the effects of market volatilities on SmartETFs Dividend 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 SmartETFs Dividend with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartETFs Dividend and Global X.
Diversification Opportunities for SmartETFs Dividend and Global X
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SmartETFs and Global is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Dividend Builder and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and SmartETFs Dividend 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 SmartETFs Dividend Builder 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 Funds has no effect on the direction of SmartETFs Dividend i.e., SmartETFs Dividend and Global X go up and down completely randomly.
Pair Corralation between SmartETFs Dividend and Global X
Given the investment horizon of 90 days SmartETFs Dividend Builder is expected to generate 0.75 times more return on investment than Global X. However, SmartETFs Dividend Builder is 1.34 times less risky than Global X. It trades about -0.02 of its potential returns per unit of risk. Global X Funds is currently generating about -0.19 per unit of risk. If you would invest 2,981 in SmartETFs Dividend Builder on August 31, 2024 and sell it today you would lose (10.00) from holding SmartETFs Dividend Builder or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmartETFs Dividend Builder vs. Global X Funds
Performance |
| Timeline |
| SmartETFs Dividend |
| Global X Funds |
SmartETFs Dividend and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartETFs Dividend and Global X
The main advantage of trading using opposite SmartETFs Dividend and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartETFs Dividend 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.| SmartETFs Dividend vs. WisdomTree Interest Rate | SmartETFs Dividend vs. First Trust Developed | SmartETFs Dividend vs. VictoryShares International Volatility | SmartETFs Dividend vs. Aquagold International |
| Global X vs. Freedom Day Dividend | Global X vs. iShares MSCI China | Global X vs. iShares Dividend and | Global X vs. SmartETFs Dividend Builder |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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