Correlation Between Global X and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both Global X and Xtrackers FTSE 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 Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MSCI and Xtrackers FTSE Developed, you can compare the effects of market volatilities on Global X and Xtrackers FTSE 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 Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Xtrackers FTSE.
Diversification Opportunities for Global X and Xtrackers FTSE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Xtrackers is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed 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 MSCI are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of Global X i.e., Global X and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between Global X and Xtrackers FTSE
Given the investment horizon of 90 days Global X is expected to generate 1.12 times less return on investment than Xtrackers FTSE. In addition to that, Global X is 1.21 times more volatile than Xtrackers FTSE Developed. It trades about 0.05 of its total potential returns per unit of risk. Xtrackers FTSE Developed is currently generating about 0.06 per unit of volatility. If you would invest 2,359 in Xtrackers FTSE Developed on September 13, 2024 and sell it today you would earn a total of 596.00 from holding Xtrackers FTSE Developed or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MSCI vs. Xtrackers FTSE Developed
Performance |
| Timeline |
| Global X MSCI |
| Xtrackers FTSE Developed |
Global X and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Xtrackers FTSE
The main advantage of trading using opposite Global X and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Xtrackers FTSE 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. iShares Emerging Markets | Global X vs. Global X SuperDividend |
| Xtrackers FTSE vs. Global X MSCI | Xtrackers FTSE vs. Global X Alternative | Xtrackers FTSE vs. First Trust Intl | Xtrackers FTSE vs. iShares AsiaPacific Dividend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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