Correlation Between Xtrackers USD and Global X
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD 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 Xtrackers USD and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers USD High and Global X MSCI, you can compare the effects of market volatilities on Xtrackers USD 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 Xtrackers USD with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and Global X.
Diversification Opportunities for Xtrackers USD and Global X
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Global is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD High and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and Xtrackers USD 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 Xtrackers USD High 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 MSCI has no effect on the direction of Xtrackers USD i.e., Xtrackers USD and Global X go up and down completely randomly.
Pair Corralation between Xtrackers USD and Global X
Given the investment horizon of 90 days Xtrackers USD is expected to generate 1.08 times less return on investment than Global X. But when comparing it to its historical volatility, Xtrackers USD High is 2.94 times less risky than Global X. It trades about 0.15 of its potential returns per unit of risk. Global X MSCI is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,291 in Global X MSCI on August 27, 2024 and sell it today you would earn a total of 143.00 from holding Global X MSCI or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers USD High vs. Global X MSCI
Performance |
| Timeline |
| Xtrackers USD High |
| Global X MSCI |
Xtrackers USD and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers USD and Global X
The main advantage of trading using opposite Xtrackers USD and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD 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.| Xtrackers USD vs. First Trust Senior | Xtrackers USD vs. First Trust Low | Xtrackers USD vs. First Trust Enhanced | Xtrackers USD vs. First Trust TCW |
| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. First Trust Intl | Global X vs. iShares AsiaPacific Dividend |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |