Correlation Between Global X and IQ Healthy
Can any of the company-specific risk be diversified away by investing in both Global X and IQ Healthy 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 IQ Healthy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X E commerce and IQ Healthy Hearts, you can compare the effects of market volatilities on Global X and IQ Healthy 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 IQ Healthy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IQ Healthy.
Diversification Opportunities for Global X and IQ Healthy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and HART is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X E commerce and IQ Healthy Hearts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Healthy Hearts 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 E commerce are associated (or correlated) with IQ Healthy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Healthy Hearts has no effect on the direction of Global X i.e., Global X and IQ Healthy go up and down completely randomly.
Pair Corralation between Global X and IQ Healthy
Given the investment horizon of 90 days Global X E commerce is expected to generate 2.09 times more return on investment than IQ Healthy. However, Global X is 2.09 times more volatile than IQ Healthy Hearts. It trades about 0.1 of its potential returns per unit of risk. IQ Healthy Hearts is currently generating about 0.05 per unit of risk. If you would invest 1,725 in Global X E commerce on August 27, 2024 and sell it today you would earn a total of 1,086 from holding Global X E commerce or generate 62.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X E commerce vs. IQ Healthy Hearts
Performance |
| Timeline |
| Global X E |
| IQ Healthy Hearts |
Global X and IQ Healthy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IQ Healthy
The main advantage of trading using opposite Global X and IQ Healthy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IQ Healthy 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 IQ Healthy will offset losses from the drop in IQ Healthy's long position.| Global X vs. ProShares Online Retail | Global X vs. Amplify Online Retail | Global X vs. ProShares Long OnlineShort | Global X vs. Global X FinTech |
| IQ Healthy vs. Global X Clean | IQ Healthy vs. Global X Renewable | IQ Healthy vs. Global X Thematic | IQ Healthy vs. Global X AgTech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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