Correlation Between IShares Global and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 IShares Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Industrials and Global X E commerce, you can compare the effects of market volatilities on IShares Global 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 IShares Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Global X.
Diversification Opportunities for IShares Global and Global X
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Industrials and Global X E commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X E and IShares Global 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 iShares Global Industrials 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 E has no effect on the direction of IShares Global i.e., IShares Global and Global X go up and down completely randomly.
Pair Corralation between IShares Global and Global X
Considering the 90-day investment horizon IShares Global is expected to generate 2.53 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Global Industrials is 1.46 times less risky than Global X. It trades about 0.07 of its potential returns per unit of risk. Global X E commerce is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,362 in Global X E commerce on August 24, 2024 and sell it today you would earn a total of 463.00 from holding Global X E commerce or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Industrials vs. Global X E commerce
Performance |
| Timeline |
| iShares Global Indus |
| Global X E |
IShares Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Global X
The main advantage of trading using opposite IShares Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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.| IShares Global vs. iShares Global Consumer | IShares Global vs. iShares Global Utilities | IShares Global vs. iShares Global Consumer | IShares Global vs. iShares Global Materials |
| Global X vs. iShares Global Industrials | Global X vs. iShares Global Consumer | Global X vs. iShares Global Utilities | Global X vs. iShares Global Financials |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |