Correlation Between Global X and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both Global X and BetaShares Global 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 BetaShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Semiconductor and BetaShares Global Government, you can compare the effects of market volatilities on Global X and BetaShares Global 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 BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BetaShares Global.
Diversification Opportunities for Global X and BetaShares Global
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and BetaShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global X Semiconductor and BetaShares Global Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global 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 Semiconductor are associated (or correlated) with BetaShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Global has no effect on the direction of Global X i.e., Global X and BetaShares Global go up and down completely randomly.
Pair Corralation between Global X and BetaShares Global
Assuming the 90 days trading horizon Global X Semiconductor is expected to generate 2.5 times more return on investment than BetaShares Global. However, Global X is 2.5 times more volatile than BetaShares Global Government. It trades about 0.07 of its potential returns per unit of risk. BetaShares Global Government is currently generating about 0.0 per unit of risk. If you would invest 1,192 in Global X Semiconductor on August 25, 2024 and sell it today you would earn a total of 443.00 from holding Global X Semiconductor or generate 37.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Semiconductor vs. BetaShares Global Government
Performance |
| Timeline |
| Global X Semiconductor |
| BetaShares Global |
Global X and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BetaShares Global
The main advantage of trading using opposite Global X and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BetaShares Global 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 BetaShares Global will offset losses from the drop in BetaShares Global's long position.| Global X vs. CD Private Equity | Global X vs. SPDR SPASX 200 | Global X vs. Ecofibre | Global X vs. iShares Global Healthcare |
| BetaShares Global vs. CD Private Equity | BetaShares Global vs. SPDR SPASX 200 | BetaShares Global vs. Ecofibre | BetaShares Global vs. iShares Global Healthcare |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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