Correlation Between Global X and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both Global X and Leverage Shares 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 Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X FinTech and Leverage Shares 3x, you can compare the effects of market volatilities on Global X and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Leverage Shares.
Diversification Opportunities for Global X and Leverage Shares
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Leverage is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Global X FinTech and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 FinTech are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Global X i.e., Global X and Leverage Shares go up and down completely randomly.
Pair Corralation between Global X and Leverage Shares
Assuming the 90 days trading horizon Global X is expected to generate 3.35 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, Global X FinTech is 4.99 times less risky than Leverage Shares. It trades about 0.19 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Leverage Shares 3x on September 13, 2024 and sell it today you would earn a total of 2,174 from holding Leverage Shares 3x or generate 116.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X FinTech vs. Leverage Shares 3x
Performance |
| Timeline |
| Global X FinTech |
| Leverage Shares 3x |
Global X and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Leverage Shares
The main advantage of trading using opposite Global X and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| Global X vs. Leverage Shares 3x | Global X vs. Leverage Shares 3x | Global X vs. Leverage Shares 3x | Global X vs. SP 500 VIX |
| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |