Correlation Between US Diversified and Global X
Can any of the company-specific risk be diversified away by investing in both US Diversified 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 US Diversified and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Diversified Real and Global X Data, you can compare the effects of market volatilities on US Diversified 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 US Diversified with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Diversified and Global X.
Diversification Opportunities for US Diversified and Global X
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PPTY and Global is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding US Diversified Real and Global X Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Data and US Diversified 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 US Diversified Real 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 Data has no effect on the direction of US Diversified i.e., US Diversified and Global X go up and down completely randomly.
Pair Corralation between US Diversified and Global X
Given the investment horizon of 90 days US Diversified Real is expected to generate 0.92 times more return on investment than Global X. However, US Diversified Real is 1.08 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Data is currently generating about 0.04 per unit of risk. If you would invest 2,653 in US Diversified Real on August 27, 2024 and sell it today you would earn a total of 755.00 from holding US Diversified Real or generate 28.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.27% |
| Values | Daily Returns |
US Diversified Real vs. Global X Data
Performance |
| Timeline |
| US Diversified Real |
| Global X Data |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Diversified and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Diversified and Global X
The main advantage of trading using opposite US Diversified and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Diversified 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.| US Diversified vs. Vanguard Real Estate | US Diversified vs. Howard Hughes | US Diversified vs. Site Centers Corp |
| Global X vs. Pacer Benchmark Industrial | Global X vs. US Diversified Real | Global X vs. Global X Thematic | Global X vs. Pacer Benchmark Data |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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