Correlation Between IShares Core and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core MSCI and Global X Funds, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Global X.
Diversification Opportunities for IShares Core and Global X
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Global is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI 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 Core 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 Core MSCI 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 Core i.e., IShares Core and Global X go up and down completely randomly.
Pair Corralation between IShares Core and Global X
Given the investment horizon of 90 days iShares Core MSCI is expected to under-perform the Global X. In addition to that, IShares Core is 1.21 times more volatile than Global X Funds. It trades about -0.21 of its total potential returns per unit of risk. Global X Funds is currently generating about -0.23 per unit of volatility. If you would invest 2,767 in Global X Funds on August 23, 2024 and sell it today you would lose (116.00) from holding Global X Funds or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Global X Funds
Performance |
| Timeline |
| iShares Core MSCI |
| Global X Funds |
IShares Core and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Global X
The main advantage of trading using opposite IShares Core and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. iShares International Developed | IShares Core vs. iShares MSCI Emerging | IShares Core vs. iShares MSCI Frontier | IShares Core vs. iShares MSCI Emerging |
| Global X vs. iShares International Developed | Global X vs. iShares MSCI Emerging | Global X vs. iShares MSCI Frontier | Global X vs. iShares MSCI Emerging |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |