Correlation Between Global X and VanEck Green
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Green 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 VanEck Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Infrastructure and VanEck Green Infrastructure, you can compare the effects of market volatilities on Global X and VanEck Green 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 VanEck Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Green.
Diversification Opportunities for Global X and VanEck Green
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and VanEck is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Global X Infrastructure and VanEck Green Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Green Infrast 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 Infrastructure are associated (or correlated) with VanEck Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Green Infrast has no effect on the direction of Global X i.e., Global X and VanEck Green go up and down completely randomly.
Pair Corralation between Global X and VanEck Green
Given the investment horizon of 90 days Global X Infrastructure is expected to generate 0.96 times more return on investment than VanEck Green. However, Global X Infrastructure is 1.04 times less risky than VanEck Green. It trades about 0.09 of its potential returns per unit of risk. VanEck Green Infrastructure is currently generating about 0.05 per unit of risk. If you would invest 3,764 in Global X Infrastructure on August 27, 2024 and sell it today you would earn a total of 774.00 from holding Global X Infrastructure or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Infrastructure vs. VanEck Green Infrastructure
Performance |
| Timeline |
| Global X Infrastructure |
| VanEck Green Infrast |
Global X and VanEck Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Green
The main advantage of trading using opposite Global X and VanEck Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Green 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 VanEck Green will offset losses from the drop in VanEck Green's long position.| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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