Correlation Between IQ Healthy and Global X
Can any of the company-specific risk be diversified away by investing in both IQ Healthy and Global X 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 IQ Healthy and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ Healthy Hearts and Global X Data, you can compare the effects of market volatilities on IQ Healthy and Global X 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 IQ Healthy with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Healthy and Global X.
Diversification Opportunities for IQ Healthy and Global X
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HART and Global is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding IQ Healthy Hearts and Global X Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Data and IQ Healthy 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 IQ Healthy Hearts are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Data has no effect on the direction of IQ Healthy i.e., IQ Healthy and Global X go up and down completely randomly.
Pair Corralation between IQ Healthy and Global X
Given the investment horizon of 90 days IQ Healthy Hearts is expected to generate 0.58 times more return on investment than Global X. However, IQ Healthy Hearts is 1.72 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Data is currently generating about 0.01 per unit of risk. If you would invest 2,898 in IQ Healthy Hearts on November 4, 2024 and sell it today you would earn a total of 386.00 from holding IQ Healthy Hearts or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.2% |
| Values | Daily Returns |
IQ Healthy Hearts vs. Global X Data
Performance |
| Timeline |
| IQ Healthy Hearts |
| Global X Data |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IQ Healthy and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ Healthy and Global X
The main advantage of trading using opposite IQ Healthy and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Healthy position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.The idea behind IQ Healthy Hearts and Global X Data pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Global X vs. Pacer Benchmark Industrial | Global X vs. US Diversified Real | Global X vs. Global X Thematic | Global X vs. Pacer Benchmark Data |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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