Correlation Between Global X and IShares MBS
Can any of the company-specific risk be diversified away by investing in both Global X and IShares MBS 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 Global X and IShares MBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Conscious and iShares MBS ETF, you can compare the effects of market volatilities on Global X and IShares MBS 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 Global X with a short position of IShares MBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares MBS.
Diversification Opportunities for Global X and IShares MBS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and IShares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global X Conscious and iShares MBS ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MBS ETF and Global X 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 Global X Conscious are associated (or correlated) with IShares MBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MBS ETF has no effect on the direction of Global X i.e., Global X and IShares MBS go up and down completely randomly.
Pair Corralation between Global X and IShares MBS
Given the investment horizon of 90 days Global X Conscious is expected to generate 2.4 times more return on investment than IShares MBS. However, Global X is 2.4 times more volatile than iShares MBS ETF. It trades about 0.1 of its potential returns per unit of risk. iShares MBS ETF is currently generating about 0.09 per unit of risk. If you would invest 3,625 in Global X Conscious on August 24, 2024 and sell it today you would earn a total of 386.00 from holding Global X Conscious or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Conscious vs. iShares MBS ETF
Performance |
| Timeline |
| Global X Conscious |
| iShares MBS ETF |
Global X and IShares MBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares MBS
The main advantage of trading using opposite Global X and IShares MBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares MBS 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 IShares MBS will offset losses from the drop in IShares MBS's long position.| Global X vs. iShares ESG Aware | Global X vs. iShares ESG Aware | Global X vs. HUMANA INC | Global X vs. Aquagold International |
| IShares MBS vs. iShares 3 7 Year | IShares MBS vs. iShares JP Morgan | IShares MBS vs. iShares Intermediate GovernmentCredit | IShares MBS vs. iShares National Muni |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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