Correlation Between Global X and IShares Flexible
Can any of the company-specific risk be diversified away by investing in both Global X and IShares Flexible 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 Flexible 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 iShares Flexible Monthly, you can compare the effects of market volatilities on Global X and IShares Flexible 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 Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Flexible.
Diversification Opportunities for Global X and IShares Flexible
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and iShares Flexible Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Flexible Monthly 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 IShares Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Flexible Monthly has no effect on the direction of Global X i.e., Global X and IShares Flexible go up and down completely randomly.
Pair Corralation between Global X and IShares Flexible
Assuming the 90 days trading horizon Global X Natural is expected to generate 19.05 times more return on investment than IShares Flexible. However, Global X is 19.05 times more volatile than iShares Flexible Monthly. It trades about 0.26 of its potential returns per unit of risk. iShares Flexible Monthly is currently generating about 0.32 per unit of risk. If you would invest 676.00 in Global X Natural on September 1, 2024 and sell it today you would earn a total of 105.00 from holding Global X Natural or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X Natural vs. iShares Flexible Monthly
Performance |
| Timeline |
| Global X Natural |
| iShares Flexible Monthly |
Global X and IShares Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares Flexible
The main advantage of trading using opposite Global X and IShares Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Flexible 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 Flexible will offset losses from the drop in IShares Flexible'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 |
| IShares Flexible vs. iShares Convertible Bond | IShares Flexible vs. iShares SP Mid Cap | IShares Flexible vs. iShares Edge MSCI | IShares Flexible vs. iShares Core Canadian |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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