Correlation Between Global X and WKLY
Can any of the company-specific risk be diversified away by investing in both Global X and WKLY 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 WKLY 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 WKLY, you can compare the effects of market volatilities on Global X and WKLY 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 WKLY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and WKLY.
Diversification Opportunities for Global X and WKLY
Average diversification
The 3 months correlation between Global and WKLY is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Global X Nasdaq and WKLY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WKLY 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 WKLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WKLY has no effect on the direction of Global X i.e., Global X and WKLY go up and down completely randomly.
Pair Corralation between Global X and WKLY
Given the investment horizon of 90 days Global X Nasdaq is expected to generate 1.11 times more return on investment than WKLY. However, Global X is 1.11 times more volatile than WKLY. It trades about 0.11 of its potential returns per unit of risk. WKLY is currently generating about 0.05 per unit of risk. If you would invest 2,049 in Global X Nasdaq on August 30, 2024 and sell it today you would earn a total of 1,232 from holding Global X Nasdaq or generate 60.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Global X Nasdaq vs. WKLY
Performance |
| Timeline |
| Global X Nasdaq |
| WKLY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global X and WKLY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and WKLY
The main advantage of trading using opposite Global X and WKLY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, WKLY 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 WKLY will offset losses from the drop in WKLY's long position.| Global X vs. Global X SP | Global X vs. Global X SP | Global X vs. Global X Russell | Global X vs. NEOS ETF Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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