Correlation Between ETFis Series and Global X
Can any of the company-specific risk be diversified away by investing in both ETFis Series 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 ETFis Series and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFis Series Trust and Global X Preferred, you can compare the effects of market volatilities on ETFis Series 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 ETFis Series with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFis Series and Global X.
Diversification Opportunities for ETFis Series and Global X
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ETFis and Global is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ETFis Series Trust and Global X Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Preferred and ETFis Series 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 ETFis Series Trust 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 Preferred has no effect on the direction of ETFis Series i.e., ETFis Series and Global X go up and down completely randomly.
Pair Corralation between ETFis Series and Global X
Given the investment horizon of 90 days ETFis Series Trust is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, ETFis Series Trust is 1.23 times less risky than Global X. The etf trades about -0.06 of its potential returns per unit of risk. The Global X Preferred is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,978 in Global X Preferred on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Global X Preferred or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFis Series Trust vs. Global X Preferred
Performance |
| Timeline |
| ETFis Series Trust |
| Global X Preferred |
ETFis Series and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFis Series and Global X
The main advantage of trading using opposite ETFis Series and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFis Series 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.| ETFis Series vs. Virtus InfraCap Preferred | ETFis Series vs. VanEck Preferred Securities | ETFis Series vs. Global X Preferred | ETFis Series vs. Innovator SP Investment |
| Global X vs. VanEck Preferred Securities | Global X vs. Global X SuperIncome | Global X vs. Virtus InfraCap Preferred | Global X vs. SPDR ICE Preferred |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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