Correlation Between Global X and SPDR ICE
Can any of the company-specific risk be diversified away by investing in both Global X and SPDR ICE 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 SPDR ICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Preferred and SPDR ICE Preferred, you can compare the effects of market volatilities on Global X and SPDR ICE 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 SPDR ICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SPDR ICE.
Diversification Opportunities for Global X and SPDR ICE
Poor diversification
The 3 months correlation between Global and SPDR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global X Preferred and SPDR ICE Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR ICE Preferred 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 Preferred are associated (or correlated) with SPDR ICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR ICE Preferred has no effect on the direction of Global X i.e., Global X and SPDR ICE go up and down completely randomly.
Pair Corralation between Global X and SPDR ICE
Given the investment horizon of 90 days Global X Preferred is expected to generate 0.97 times more return on investment than SPDR ICE. However, Global X Preferred is 1.03 times less risky than SPDR ICE. It trades about 0.1 of its potential returns per unit of risk. SPDR ICE Preferred is currently generating about 0.09 per unit of risk. If you would invest 1,921 in Global X Preferred on September 1, 2024 and sell it today you would earn a total of 118.00 from holding Global X Preferred or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Preferred vs. SPDR ICE Preferred
Performance |
| Timeline |
| Global X Preferred |
| SPDR ICE Preferred |
Global X and SPDR ICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SPDR ICE
The main advantage of trading using opposite Global X and SPDR ICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SPDR ICE 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 SPDR ICE will offset losses from the drop in SPDR ICE's long position.| Global X vs. VanEck Preferred Securities | Global X vs. Global X SuperIncome | Global X vs. Virtus InfraCap Preferred | Global X vs. SPDR ICE Preferred |
| SPDR ICE vs. VanEck Preferred Securities | SPDR ICE vs. Invesco Preferred ETF | SPDR ICE vs. Invesco Financial Preferred | SPDR ICE vs. Global X SuperIncome |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |