Correlation Between PeakShares Sector and Global X
Can any of the company-specific risk be diversified away by investing in both PeakShares Sector 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 PeakShares Sector and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PeakShares Sector Rotation and Global X SP, you can compare the effects of market volatilities on PeakShares Sector 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 PeakShares Sector with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of PeakShares Sector and Global X.
Diversification Opportunities for PeakShares Sector and Global X
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PeakShares and Global is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding PeakShares Sector Rotation and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and PeakShares Sector 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 PeakShares Sector Rotation 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 SP has no effect on the direction of PeakShares Sector i.e., PeakShares Sector and Global X go up and down completely randomly.
Pair Corralation between PeakShares Sector and Global X
Given the investment horizon of 90 days PeakShares Sector Rotation is expected to generate 2.35 times more return on investment than Global X. However, PeakShares Sector is 2.35 times more volatile than Global X SP. It trades about 0.23 of its potential returns per unit of risk. Global X SP is currently generating about 0.42 per unit of risk. If you would invest 2,749 in PeakShares Sector Rotation on September 2, 2024 and sell it today you would earn a total of 127.00 from holding PeakShares Sector Rotation or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PeakShares Sector Rotation vs. Global X SP
Performance |
| Timeline |
| PeakShares Sector |
| Global X SP |
PeakShares Sector and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PeakShares Sector and Global X
The main advantage of trading using opposite PeakShares Sector and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PeakShares Sector 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.| PeakShares Sector vs. Global X SP | PeakShares Sector vs. Amplify CWP Enhanced | PeakShares Sector vs. JPMorgan Equity Premium |
| Global X vs. Global X Russell | Global X vs. Global X NASDAQ | Global X vs. NEOS ETF Trust | Global X vs. JPMorgan Equity Premium |
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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