Correlation Between IShares Interest and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Interest 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 Interest 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 Interest Rate and Global X Funds, you can compare the effects of market volatilities on IShares Interest 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 Interest with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Interest and Global X.
Diversification Opportunities for IShares Interest and Global X
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Interest Rate 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 Interest 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 Interest Rate 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 Interest i.e., IShares Interest and Global X go up and down completely randomly.
Pair Corralation between IShares Interest and Global X
Given the investment horizon of 90 days iShares Interest Rate is expected to generate 11.39 times more return on investment than Global X. However, IShares Interest is 11.39 times more volatile than Global X Funds. It trades about 0.33 of its potential returns per unit of risk. Global X Funds is currently generating about 1.01 per unit of risk. If you would invest 9,258 in iShares Interest Rate on September 3, 2024 and sell it today you would earn a total of 113.00 from holding iShares Interest Rate or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Interest Rate vs. Global X Funds
Performance |
| Timeline |
| iShares Interest Rate |
| Global X Funds |
IShares Interest and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Interest and Global X
The main advantage of trading using opposite IShares Interest and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Interest 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 Interest vs. iShares Interest Rate | IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Inflation Hedged | IShares Interest vs. ProShares Investment GradeInterest |
| Global X vs. Global X Funds | Global X vs. US Treasury 12 | Global X vs. Tidal Trust II | Global X vs. Franklin Liberty Treasury |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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