Correlation Between DSJA and Global X
Can any of the company-specific risk be diversified away by investing in both DSJA 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 DSJA and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and Global X Funds, you can compare the effects of market volatilities on DSJA 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 DSJA with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and Global X.
Diversification Opportunities for DSJA and Global X
Very poor diversification
The 3 months correlation between DSJA and Global is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DSJA 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 DSJA 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 DSJA 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 DSJA i.e., DSJA and Global X go up and down completely randomly.
Pair Corralation between DSJA and Global X
Given the investment horizon of 90 days DSJA is expected to generate 1.05 times less return on investment than Global X. But when comparing it to its historical volatility, DSJA is 1.45 times less risky than Global X. It trades about 0.14 of its potential returns per unit of risk. Global X Funds is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,055 in Global X Funds on August 30, 2024 and sell it today you would earn a total of 1,296 from holding Global X Funds or generate 63.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.31% |
| Values | Daily Returns |
DSJA vs. Global X Funds
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global X Funds |
DSJA and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and Global X
The main advantage of trading using opposite DSJA and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA 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.| DSJA vs. ProShares VIX Mid Term | DSJA vs. ProShares VIX Short Term | DSJA vs. iPath Series B | DSJA vs. ProShares Short Russell2000 |
| Global X vs. Global X SP | Global X vs. Amplify CWP Enhanced | Global X vs. Global X Russell | Global X vs. JPMorgan Nasdaq Equity |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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