Correlation Between IShares Ultra and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Ultra 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 IShares Ultra and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Ultra Short Term and Global X Funds, you can compare the effects of market volatilities on IShares Ultra 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 IShares Ultra with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ultra and Global X.
Diversification Opportunities for IShares Ultra and Global X
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ultra Short Term and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and IShares Ultra 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 iShares Ultra Short Term 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 Funds has no effect on the direction of IShares Ultra i.e., IShares Ultra and Global X go up and down completely randomly.
Pair Corralation between IShares Ultra and Global X
Given the investment horizon of 90 days IShares Ultra is expected to generate 1.21 times less return on investment than Global X. In addition to that, IShares Ultra is 1.95 times more volatile than Global X Funds. It trades about 0.4 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.95 per unit of volatility. If you would invest 10,002 in Global X Funds on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Global X Funds or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Ultra Short Term vs. Global X Funds
Performance |
| Timeline |
| iShares Ultra Short |
| Global X Funds |
IShares Ultra and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Ultra and Global X
The main advantage of trading using opposite IShares Ultra and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ultra 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.| IShares Ultra vs. Rbb Fund | IShares Ultra vs. US Treasury 12 | IShares Ultra vs. Rbb Fund | IShares Ultra vs. Rbb Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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