Correlation Between OShares Global and Global X
Can any of the company-specific risk be diversified away by investing in both OShares Global 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 OShares Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OShares Global Internet and Global X Cloud, you can compare the effects of market volatilities on OShares Global 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 OShares Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of OShares Global and Global X.
Diversification Opportunities for OShares Global and Global X
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between OShares and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding OShares Global Internet and Global X Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Cloud and OShares Global 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 OShares Global Internet 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 Cloud has no effect on the direction of OShares Global i.e., OShares Global and Global X go up and down completely randomly.
Pair Corralation between OShares Global and Global X
Given the investment horizon of 90 days OShares Global is expected to generate 1.57 times less return on investment than Global X. But when comparing it to its historical volatility, OShares Global Internet is 1.46 times less risky than Global X. It trades about 0.45 of its potential returns per unit of risk. Global X Cloud is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 2,095 in Global X Cloud on September 1, 2024 and sell it today you would earn a total of 368.00 from holding Global X Cloud or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
OShares Global Internet vs. Global X Cloud
Performance |
| Timeline |
| OShares Global Internet |
| Global X Cloud |
OShares Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OShares Global and Global X
The main advantage of trading using opposite OShares Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OShares Global 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.| OShares Global vs. Nexalin Technology | OShares Global vs. Kilroy Realty Corp | OShares Global vs. Highwoods Properties | OShares Global vs. Karat Packaging |
| Global X vs. Nexalin Technology | Global X vs. Kilroy Realty Corp | Global X vs. Highwoods Properties | Global X vs. Karat Packaging |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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