Correlation Between Managed Account and Global X
Can any of the company-specific risk be diversified away by investing in both Managed Account 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 Managed Account and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Managed Account Series and Global X Autonomous, you can compare the effects of market volatilities on Managed Account 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 Managed Account with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Managed Account and Global X.
Diversification Opportunities for Managed Account and Global X
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Managed and Global is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Managed Account Series and Global X Autonomous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Autonomous and Managed Account 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 Managed Account Series 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 Autonomous has no effect on the direction of Managed Account i.e., Managed Account and Global X go up and down completely randomly.
Pair Corralation between Managed Account and Global X
Assuming the 90 days horizon Managed Account is expected to generate 37.38 times less return on investment than Global X. But when comparing it to its historical volatility, Managed Account Series is 6.73 times less risky than Global X. It trades about 0.02 of its potential returns per unit of risk. Global X Autonomous is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,177 in Global X Autonomous on September 3, 2024 and sell it today you would earn a total of 188.00 from holding Global X Autonomous or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Managed Account Series vs. Global X Autonomous
Performance |
| Timeline |
| Managed Account Series |
| Global X Autonomous |
Managed Account and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Managed Account and Global X
The main advantage of trading using opposite Managed Account and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Managed Account 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.| Managed Account vs. Dreyfus Natural Resources | Managed Account vs. Fidelity Advisor Energy | Managed Account vs. Goehring Rozencwajg Resources | Managed Account vs. Gmo Resources |
| Global X vs. Managed Account Series | Global X vs. Fidelity Sai International | Global X vs. Schwab Strategic Trust | Global X vs. Inpex Corp ADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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