Correlation Between FT Vest and Global X

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Can any of the company-specific risk be diversified away by investing in both FT Vest 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 FT Vest and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Vest Dow and Global X Dow, you can compare the effects of market volatilities on FT Vest 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 FT Vest with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and Global X.

Diversification Opportunities for FT Vest and Global X

FDNDGlobalDiversified AwayFDNDGlobalDiversified Away100%
0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FDND and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Dow and Global X Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Dow and FT Vest 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 FT Vest Dow 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 Dow has no effect on the direction of FT Vest i.e., FT Vest and Global X go up and down completely randomly.

Pair Corralation between FT Vest and Global X

Given the investment horizon of 90 days FT Vest Dow is expected to under-perform the Global X. In addition to that, FT Vest is 3.02 times more volatile than Global X Dow. It trades about -0.12 of its total potential returns per unit of risk. Global X Dow is currently generating about -0.05 per unit of volatility. If you would invest  2,290  in Global X Dow on November 25, 2024 and sell it today you would lose (9.00) from holding Global X Dow or give up 0.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

FT Vest Dow  vs.  Global X Dow

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0510
JavaScript chart by amCharts 3.21.15FDND DJIA
       Timeline  
FT Vest Dow 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in FT Vest Dow are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, FT Vest is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2222.52323.52424.5
Global X Dow 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Dow are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Global X is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.621.82222.222.422.622.82323.2

FT Vest and Global X Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.62-2.71-1.8-0.890.01580.931.882.823.77 0.51.01.5
JavaScript chart by amCharts 3.21.15FDND DJIA
       Returns  

Pair Trading with FT Vest and Global X

The main advantage of trading using opposite FT Vest and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest 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.
The idea behind FT Vest Dow and Global X Dow pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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