Correlation Between Global X and ISharesUBS Treasury
Can any of the company-specific risk be diversified away by investing in both Global X and ISharesUBS Treasury 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 ISharesUBS Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Hydrogen and iSharesUBS Treasury, you can compare the effects of market volatilities on Global X and ISharesUBS Treasury 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 ISharesUBS Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and ISharesUBS Treasury.
Diversification Opportunities for Global X and ISharesUBS Treasury
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and ISharesUBS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and iSharesUBS Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSharesUBS Treasury 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 Hydrogen are associated (or correlated) with ISharesUBS Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSharesUBS Treasury has no effect on the direction of Global X i.e., Global X and ISharesUBS Treasury go up and down completely randomly.
Pair Corralation between Global X and ISharesUBS Treasury
Assuming the 90 days trading horizon Global X Hydrogen is expected to generate 13.57 times more return on investment than ISharesUBS Treasury. However, Global X is 13.57 times more volatile than iSharesUBS Treasury. It trades about 0.19 of its potential returns per unit of risk. iSharesUBS Treasury is currently generating about 0.1 per unit of risk. If you would invest 436.00 in Global X Hydrogen on August 30, 2024 and sell it today you would earn a total of 56.00 from holding Global X Hydrogen or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Hydrogen vs. iSharesUBS Treasury
Performance |
| Timeline |
| Global X Hydrogen |
| iSharesUBS Treasury |
Global X and ISharesUBS Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and ISharesUBS Treasury
The main advantage of trading using opposite Global X and ISharesUBS Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, ISharesUBS Treasury 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 ISharesUBS Treasury will offset losses from the drop in ISharesUBS Treasury's long position.| Global X vs. BetaShares Geared Australian | Global X vs. BetaShares Global Robotics | Global X vs. iShares China LargeCap | Global X vs. Russell Australian Government |
| ISharesUBS Treasury vs. iShares MSCI Emerging | ISharesUBS Treasury vs. Global X Hydrogen | ISharesUBS Treasury vs. Janus Henderson Sustainable | ISharesUBS Treasury vs. JPMorgan Equity Premium |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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