Correlation Between Global X and IShares Focused
Can any of the company-specific risk be diversified away by investing in both Global X and IShares Focused 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 IShares Focused 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 iShares Focused Value, you can compare the effects of market volatilities on Global X and IShares Focused 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 IShares Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Focused.
Diversification Opportunities for Global X and IShares Focused
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and IShares is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and iShares Focused Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Focused Value 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 IShares Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Focused Value has no effect on the direction of Global X i.e., Global X and IShares Focused go up and down completely randomly.
Pair Corralation between Global X and IShares Focused
Given the investment horizon of 90 days Global X MSCI is expected to generate 1.09 times more return on investment than IShares Focused. However, Global X is 1.09 times more volatile than iShares Focused Value. It trades about 0.01 of its potential returns per unit of risk. iShares Focused Value is currently generating about 0.01 per unit of risk. If you would invest 2,497 in Global X MSCI on December 2, 2024 and sell it today you would earn a total of 3.00 from holding Global X MSCI or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MSCI vs. iShares Focused Value
Performance |
| Timeline |
| Global X MSCI |
| iShares Focused Value |
Global X and IShares Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares Focused
The main advantage of trading using opposite Global X and IShares Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Focused 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 IShares Focused will offset losses from the drop in IShares Focused'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 |
| IShares Focused vs. Roundhill Acquirers Deep | IShares Focused vs. BlackRock Equity Factor | IShares Focused vs. iShares MSCI USA | IShares Focused vs. iShares Evolved Discretionary |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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