Correlation Between Global X and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Global X and IShares MSCI 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 IShares MSCI 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 iShares MSCI Emerging, you can compare the effects of market volatilities on Global X and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares MSCI.
Diversification Opportunities for Global X and IShares MSCI
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and IShares is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Emerging has no effect on the direction of Global X i.e., Global X and IShares MSCI go up and down completely randomly.
Pair Corralation between Global X and IShares MSCI
Given the investment horizon of 90 days Global X Funds is expected to generate 0.65 times more return on investment than IShares MSCI. However, Global X Funds is 1.55 times less risky than IShares MSCI. It trades about 0.12 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about 0.04 per unit of risk. If you would invest 2,651 in Global X Funds on August 26, 2024 and sell it today you would earn a total of 706.00 from holding Global X Funds or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.89% |
| Values | Daily Returns |
Global X Funds vs. iShares MSCI Emerging
Performance |
| Timeline |
| Global X Funds |
| iShares MSCI Emerging |
Global X and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares MSCI
The main advantage of trading using opposite Global X and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Global X vs. Cambria Micro And | Global X vs. Invesco Actively Managed | Global X vs. iShares Trust | Global X vs. EMCS |
| IShares MSCI vs. Cambria Micro And | IShares MSCI vs. Invesco Actively Managed | IShares MSCI vs. iShares Trust | IShares MSCI vs. EMCS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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