Correlation Between IShares Financials and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Financials 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 Financials 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 Financials ETF and Global X Blockchain, you can compare the effects of market volatilities on IShares Financials 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 Financials with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Financials and Global X.
Diversification Opportunities for IShares Financials and Global X
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Global is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Financials ETF 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 Financials 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 Financials ETF 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 Financials i.e., IShares Financials and Global X go up and down completely randomly.
Pair Corralation between IShares Financials and Global X
Considering the 90-day investment horizon IShares Financials is expected to generate 4.56 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Financials ETF is 4.63 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Blockchain is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,650 in Global X Blockchain on August 23, 2024 and sell it today you would earn a total of 4,988 from holding Global X Blockchain or generate 302.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Financials ETF vs. Global X Blockchain
Performance |
| Timeline |
| iShares Financials ETF |
| Global X Blockchain |
IShares Financials and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Financials and Global X
The main advantage of trading using opposite IShares Financials and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Financials 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 Financials vs. iShares Financial Services | IShares Financials vs. iShares Industrials ETF | IShares Financials vs. iShares Consumer Discretionary | IShares Financials vs. iShares Healthcare ETF |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |