Correlation Between Xtrackers Emerging and Global X
Can any of the company-specific risk be diversified away by investing in both Xtrackers Emerging 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 Xtrackers Emerging and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Emerging Markets and Global X MSCI, you can compare the effects of market volatilities on Xtrackers Emerging 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 Xtrackers Emerging with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Emerging and Global X.
Diversification Opportunities for Xtrackers Emerging and Global X
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and Global is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Emerging Markets and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and Xtrackers Emerging 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 Xtrackers Emerging Markets 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 MSCI has no effect on the direction of Xtrackers Emerging i.e., Xtrackers Emerging and Global X go up and down completely randomly.
Pair Corralation between Xtrackers Emerging and Global X
Given the investment horizon of 90 days Xtrackers Emerging is expected to generate 2.94 times less return on investment than Global X. In addition to that, Xtrackers Emerging is 1.03 times more volatile than Global X MSCI. It trades about 0.05 of its total potential returns per unit of risk. Global X MSCI is currently generating about 0.16 per unit of volatility. If you would invest 1,414 in Global X MSCI on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Global X MSCI or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Emerging Markets vs. Global X MSCI
Performance |
| Timeline |
| Xtrackers Emerging |
| Global X MSCI |
Xtrackers Emerging and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Emerging and Global X
The main advantage of trading using opposite Xtrackers Emerging and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Emerging 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.| Xtrackers Emerging vs. Global X MSCI | Xtrackers Emerging vs. Global X Alternative | Xtrackers Emerging vs. iShares Emerging Markets | Xtrackers Emerging vs. Global X SuperDividend |
| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. First Trust Intl | Global X vs. iShares AsiaPacific Dividend |
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 CEOs Directory module to screen CEOs from public companies around the world.
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