Correlation Between Robo Global and Global X
Can any of the company-specific risk be diversified away by investing in both Robo Global 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 Robo Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robo Global Robotics and Global X Cybersecurity, you can compare the effects of market volatilities on Robo Global 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 Robo Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robo Global and Global X.
Diversification Opportunities for Robo Global and Global X
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Robo and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Robo Global Robotics and Global X Cybersecurity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Cybersecurity and Robo Global 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 Robo Global Robotics 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 Cybersecurity has no effect on the direction of Robo Global i.e., Robo Global and Global X go up and down completely randomly.
Pair Corralation between Robo Global and Global X
Given the investment horizon of 90 days Robo Global is expected to generate 1.76 times less return on investment than Global X. But when comparing it to its historical volatility, Robo Global Robotics is 1.11 times less risky than Global X. It trades about 0.16 of its potential returns per unit of risk. Global X Cybersecurity is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,122 in Global X Cybersecurity on August 28, 2024 and sell it today you would earn a total of 216.00 from holding Global X Cybersecurity or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Robo Global Robotics vs. Global X Cybersecurity
Performance |
| Timeline |
| Robo Global Robotics |
| Global X Cybersecurity |
Robo Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robo Global and Global X
The main advantage of trading using opposite Robo Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robo Global 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.| Robo Global vs. Global X Robotics | Robo Global vs. Amplify ETF Trust | Robo Global vs. First Trust Cloud | Robo Global vs. First Trust Nasdaq |
| Global X vs. iShares Cybersecurity and | Global X vs. First Trust NASDAQ | Global X vs. Global X Cloud | Global X vs. Amplify 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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