Correlation Between International Drawdown and Global X
Can any of the company-specific risk be diversified away by investing in both International Drawdown 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 International Drawdown and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Drawdown Managed and Global X SP, you can compare the effects of market volatilities on International Drawdown 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 International Drawdown with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Drawdown and Global X.
Diversification Opportunities for International Drawdown and Global X
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Global is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding International Drawdown Managed and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and International Drawdown 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 International Drawdown Managed 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 SP has no effect on the direction of International Drawdown i.e., International Drawdown and Global X go up and down completely randomly.
Pair Corralation between International Drawdown and Global X
Given the investment horizon of 90 days International Drawdown Managed is expected to under-perform the Global X. In addition to that, International Drawdown is 1.99 times more volatile than Global X SP. It trades about -0.02 of its total potential returns per unit of risk. Global X SP is currently generating about 0.42 per unit of volatility. If you would invest 4,066 in Global X SP on September 2, 2024 and sell it today you would earn a total of 147.00 from holding Global X SP or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Drawdown Managed vs. Global X SP
Performance |
| Timeline |
| International Drawdown |
| Global X SP |
International Drawdown and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Drawdown and Global X
The main advantage of trading using opposite International Drawdown and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Drawdown 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.| International Drawdown vs. FT Vest Equity | International Drawdown vs. Zillow Group Class | International Drawdown vs. Northern Lights | International Drawdown vs. VanEck Vectors Moodys |
| Global X vs. Global X Russell | Global X vs. Global X NASDAQ | Global X vs. NEOS ETF Trust | Global X vs. JPMorgan Equity Premium |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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