Correlation Between Global X and VanEck China
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck China 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 VanEck China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and VanEck China Bond, you can compare the effects of market volatilities on Global X and VanEck China 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 VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck China.
Diversification Opportunities for Global X and VanEck China
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and VanEck is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond 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 Funds are associated (or correlated) with VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of Global X i.e., Global X and VanEck China go up and down completely randomly.
Pair Corralation between Global X and VanEck China
Given the investment horizon of 90 days Global X Funds is expected to under-perform the VanEck China. In addition to that, Global X is 5.8 times more volatile than VanEck China Bond. It trades about -0.31 of its total potential returns per unit of risk. VanEck China Bond is currently generating about 0.1 per unit of volatility. If you would invest 2,208 in VanEck China Bond on September 13, 2024 and sell it today you would earn a total of 9.00 from holding VanEck China Bond or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. VanEck China Bond
Performance |
| Timeline |
| Global X Funds |
| VanEck China Bond |
Global X and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck China
The main advantage of trading using opposite Global X and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck China 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 VanEck China will offset losses from the drop in VanEck China's long position.| Global X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. SCOR PK | Global X vs. Morningstar Unconstrained Allocation |
| VanEck China vs. First Trust SSI | VanEck China vs. First Trust BuyWrite | VanEck China vs. First Trust Managed | VanEck China vs. First Trust Tactical |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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