Correlation Between Global X and IShares International
Can any of the company-specific risk be diversified away by investing in both Global X and IShares International 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 IShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and iShares International Developed, you can compare the effects of market volatilities on Global X and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares International.
Diversification Opportunities for Global X and IShares International
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and IShares is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and iShares International Develope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 Funds are associated (or correlated) with IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of Global X i.e., Global X and IShares International go up and down completely randomly.
Pair Corralation between Global X and IShares International
Considering the 90-day investment horizon Global X Funds is expected to generate 0.93 times more return on investment than IShares International. However, Global X Funds is 1.07 times less risky than IShares International. It trades about 0.02 of its potential returns per unit of risk. iShares International Developed is currently generating about 0.01 per unit of risk. If you would invest 2,482 in Global X Funds on August 24, 2024 and sell it today you would earn a total of 169.00 from holding Global X Funds or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Global X Funds vs. iShares International Develope
Performance |
| Timeline |
| Global X Funds |
| iShares International |
Global X and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares International
The main advantage of trading using opposite Global X and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International's long position.| Global X vs. iShares International Developed | Global X vs. iShares MSCI Emerging | Global X vs. iShares MSCI Frontier | Global X vs. iShares MSCI Emerging |
| IShares International vs. FlexShares Global Quality | IShares International vs. ALPS REIT Dividend | IShares International vs. WisdomTree New Economy | IShares International vs. First Trust RBA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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