Correlation Between Global X and Formidable ETF
Can any of the company-specific risk be diversified away by investing in both Global X and Formidable ETF 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 Formidable ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X NASDAQ and Formidable ETF, you can compare the effects of market volatilities on Global X and Formidable ETF 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 Formidable ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Formidable ETF.
Diversification Opportunities for Global X and Formidable ETF
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Formidable is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Global X NASDAQ and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF 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 NASDAQ are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of Global X i.e., Global X and Formidable ETF go up and down completely randomly.
Pair Corralation between Global X and Formidable ETF
Given the investment horizon of 90 days Global X NASDAQ is expected to generate 1.18 times more return on investment than Formidable ETF. However, Global X is 1.18 times more volatile than Formidable ETF. It trades about 0.25 of its potential returns per unit of risk. Formidable ETF is currently generating about 0.24 per unit of risk. If you would invest 1,794 in Global X NASDAQ on October 20, 2024 and sell it today you would earn a total of 64.00 from holding Global X NASDAQ or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X NASDAQ vs. Formidable ETF
Performance |
| Timeline |
| Global X NASDAQ |
| Formidable ETF |
Global X and Formidable ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Formidable ETF
The main advantage of trading using opposite Global X and Formidable ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Formidable ETF 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 Formidable ETF will offset losses from the drop in Formidable ETF's long position.| Global X vs. Global X Russell | Global X vs. JPMorgan Equity Premium | Global X vs. Global X SP | Global X vs. NEOS ETF Trust |
| Formidable ETF vs. Franklin Liberty Systematic | Formidable ETF vs. Alger Mid Cap | Formidable ETF vs. Tidal ETF Trust | Formidable ETF vs. First Trust Managed |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
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| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |