Correlation Between IShares Emergent and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Emergent 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 Emergent 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 Emergent Food and Global X Blockchain, you can compare the effects of market volatilities on IShares Emergent 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 Emergent with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Emergent and Global X.
Diversification Opportunities for IShares Emergent and Global X
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Global is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding iShares Emergent Food and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and IShares Emergent 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 Emergent Food 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 Blockchain has no effect on the direction of IShares Emergent i.e., IShares Emergent and Global X go up and down completely randomly.
Pair Corralation between IShares Emergent and Global X
Given the investment horizon of 90 days IShares Emergent is expected to generate 11.26 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Emergent Food is 8.46 times less risky than Global X. It trades about 0.13 of its potential returns per unit of risk. Global X Blockchain is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,615 in Global X Blockchain on August 31, 2024 and sell it today you would earn a total of 1,341 from holding Global X Blockchain or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Emergent Food vs. Global X Blockchain
Performance |
| Timeline |
| iShares Emergent Food |
| Global X Blockchain |
IShares Emergent and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Emergent and Global X
The main advantage of trading using opposite IShares Emergent and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Emergent 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 Emergent vs. iShares Blockchain and | IShares Emergent vs. iShares MSCI Global | IShares Emergent vs. Global X AgTech | IShares Emergent vs. Ishares Trust |
| Global X vs. VanEck Digital Transformation | Global X vs. Bitwise Crypto Industry | Global X vs. First Trust Indxx | Global X vs. First Trust SkyBridge |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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