Correlation Between Global X and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Global X and Exchange Traded 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 Exchange Traded 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 Exchange Traded Concepts, you can compare the effects of market volatilities on Global X and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Exchange Traded.
Diversification Opportunities for Global X and Exchange Traded
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Exchange is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Global X i.e., Global X and Exchange Traded go up and down completely randomly.
Pair Corralation between Global X and Exchange Traded
If you would invest 2,486 in Global X MSCI on September 12, 2024 and sell it today you would earn a total of 25.45 from holding Global X MSCI or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.6% |
| Values | Daily Returns |
Global X MSCI vs. Exchange Traded Concepts
Performance |
| Timeline |
| Global X MSCI |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global X and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Exchange Traded
The main advantage of trading using opposite Global X and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded'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 |
| Exchange Traded vs. SPDR Portfolio Aggregate | Exchange Traded vs. WBI Power Factor | Exchange Traded vs. Global X MSCI | Exchange Traded vs. HUMANA INC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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