Correlation Between Global X and Vanguard All
Can any of the company-specific risk be diversified away by investing in both Global X and Vanguard All 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 Vanguard All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Natural and Vanguard All Equity ETF, you can compare the effects of market volatilities on Global X and Vanguard All 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 Vanguard All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Vanguard All.
Diversification Opportunities for Global X and Vanguard All
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Vanguard is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and Vanguard All Equity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard All Equity 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 Natural are associated (or correlated) with Vanguard All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard All Equity has no effect on the direction of Global X i.e., Global X and Vanguard All go up and down completely randomly.
Pair Corralation between Global X and Vanguard All
Assuming the 90 days trading horizon Global X Natural is expected to under-perform the Vanguard All. In addition to that, Global X is 2.99 times more volatile than Vanguard All Equity ETF. It trades about -0.07 of its total potential returns per unit of risk. Vanguard All Equity ETF is currently generating about 0.2 per unit of volatility. If you would invest 3,455 in Vanguard All Equity ETF on September 1, 2024 and sell it today you would earn a total of 1,206 from holding Vanguard All Equity ETF or generate 34.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Natural vs. Vanguard All Equity ETF
Performance |
| Timeline |
| Global X Natural |
| Vanguard All Equity |
Global X and Vanguard All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Vanguard All
The main advantage of trading using opposite Global X and Vanguard All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Vanguard All 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 Vanguard All will offset losses from the drop in Vanguard All's long position.| Global X vs. Global X Crude | Global X vs. Global X Silver | Global X vs. Global X Gold | Global X vs. Global X Active |
| Vanguard All vs. Vanguard Growth Portfolio | Vanguard All vs. iShares Core Equity | Vanguard All vs. Vanguard Balanced Portfolio | Vanguard All vs. iShares Core Growth |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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