Correlation Between Global X and IShares Healthcare
Can any of the company-specific risk be diversified away by investing in both Global X and IShares Healthcare 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 Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and iShares Healthcare ETF, you can compare the effects of market volatilities on Global X and IShares Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Healthcare.
Diversification Opportunities for Global X and IShares Healthcare
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and IShares is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and iShares Healthcare ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Healthcare ETF 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 Thematic are associated (or correlated) with IShares Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Healthcare ETF has no effect on the direction of Global X i.e., Global X and IShares Healthcare go up and down completely randomly.
Pair Corralation between Global X and IShares Healthcare
Given the investment horizon of 90 days Global X is expected to generate 1.07 times less return on investment than IShares Healthcare. In addition to that, Global X is 2.11 times more volatile than iShares Healthcare ETF. It trades about 0.01 of its total potential returns per unit of risk. iShares Healthcare ETF is currently generating about 0.03 per unit of volatility. If you would invest 5,608 in iShares Healthcare ETF on August 30, 2024 and sell it today you would earn a total of 587.00 from holding iShares Healthcare ETF or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Thematic vs. iShares Healthcare ETF
Performance |
| Timeline |
| Global X Thematic |
| iShares Healthcare ETF |
Global X and IShares Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares Healthcare
The main advantage of trading using opposite Global X and IShares Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Healthcare 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 Healthcare will offset losses from the drop in IShares Healthcare's long position.| Global X vs. Global X Conscious | Global X vs. Global X SP | Global X vs. Global X Millennials | Global X vs. Global X MSCI |
| IShares Healthcare vs. iShares Financials ETF | IShares Healthcare vs. iShares Consumer Discretionary | IShares Healthcare vs. iShares Industrials ETF | IShares Healthcare vs. iShares Consumer Staples |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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