Correlation Between Global X and EMCS
Can any of the company-specific risk be diversified away by investing in both Global X and EMCS 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 EMCS 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 EMCS, you can compare the effects of market volatilities on Global X and EMCS 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 EMCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and EMCS.
Diversification Opportunities for Global X and EMCS
Very weak diversification
The 3 months correlation between Global and EMCS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and EMCS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCS 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 EMCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCS has no effect on the direction of Global X i.e., Global X and EMCS go up and down completely randomly.
Pair Corralation between Global X and EMCS
Given the investment horizon of 90 days Global X Funds is expected to generate 0.74 times more return on investment than EMCS. However, Global X Funds is 1.36 times less risky than EMCS. It trades about 0.21 of its potential returns per unit of risk. EMCS is currently generating about -0.21 per unit of risk. If you would invest 3,189 in Global X Funds on August 23, 2024 and sell it today you would earn a total of 132.00 from holding Global X Funds or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. EMCS
Performance |
| Timeline |
| Global X Funds |
| EMCS |
Global X and EMCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and EMCS
The main advantage of trading using opposite Global X and EMCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, EMCS 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 EMCS will offset losses from the drop in EMCS's long position.| Global X vs. Invesco Actively Managed | Global X vs. iShares Trust | Global X vs. EMCS | Global X vs. iShares MSCI Emerging |
| EMCS vs. Invesco Actively Managed | EMCS vs. iShares Trust | EMCS vs. iShares MSCI Emerging | EMCS vs. iShares MSCI Emerging |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |