Correlation Between Global X and BFIT
Can any of the company-specific risk be diversified away by investing in both Global X and BFIT 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 BFIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Guru and BFIT, you can compare the effects of market volatilities on Global X and BFIT 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 BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BFIT.
Diversification Opportunities for Global X and BFIT
Good diversification
The 3 months correlation between Global and BFIT is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Global X Guru and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT 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 Guru are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Global X i.e., Global X and BFIT go up and down completely randomly.
Pair Corralation between Global X and BFIT
Given the investment horizon of 90 days Global X Guru is expected to generate 0.82 times more return on investment than BFIT. However, Global X Guru is 1.21 times less risky than BFIT. It trades about 0.09 of its potential returns per unit of risk. BFIT is currently generating about 0.06 per unit of risk. If you would invest 3,475 in Global X Guru on August 30, 2024 and sell it today you would earn a total of 1,820 from holding Global X Guru or generate 52.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Global X Guru vs. BFIT
Performance |
| Timeline |
| Global X Guru |
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global X and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BFIT
The main advantage of trading using opposite Global X and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| Global X vs. iShares MSCI USA | Global X vs. iShares MSCI USA | Global X vs. iShares MSCI USA | Global X vs. iShares Expanded Tech Software |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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