Correlation Between BetaPro SP and Global X
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 BetaPro SP and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and Global X NASDAQ 100, you can compare the effects of market volatilities on BetaPro SP 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 BetaPro SP with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and Global X.
Diversification Opportunities for BetaPro SP and Global X
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and Global is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and Global X NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ and BetaPro SP 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 BetaPro SP 500 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 NASDAQ has no effect on the direction of BetaPro SP i.e., BetaPro SP and Global X go up and down completely randomly.
Pair Corralation between BetaPro SP and Global X
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 1.35 times less risky than Global X. The etf trades about -0.09 of its potential returns per unit of risk. The Global X NASDAQ 100 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,614 in Global X NASDAQ 100 on September 2, 2024 and sell it today you would earn a total of 2,778 from holding Global X NASDAQ 100 or generate 49.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. Global X NASDAQ 100
Performance |
| Timeline |
| BetaPro SP 500 |
| Global X NASDAQ |
BetaPro SP and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and Global X
The main advantage of trading using opposite BetaPro SP and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
| Global X vs. Global X SP | Global X vs. iShares SPTSX Capped | Global X vs. iShares NASDAQ 100 | Global X vs. Global X SPTSX |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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