Correlation Between Global X and BlackRock ETF
Can any of the company-specific risk be diversified away by investing in both Global X and BlackRock ETF 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 BlackRock ETF 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 BlackRock ETF Trust, you can compare the effects of market volatilities on Global X and BlackRock ETF 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 BlackRock ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BlackRock ETF.
Diversification Opportunities for Global X and BlackRock ETF
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and BlackRock is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and BlackRock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ETF Trust 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 BlackRock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ETF Trust has no effect on the direction of Global X i.e., Global X and BlackRock ETF go up and down completely randomly.
Pair Corralation between Global X and BlackRock ETF
Given the investment horizon of 90 days Global X Funds is expected to generate 7.5 times more return on investment than BlackRock ETF. However, Global X is 7.5 times more volatile than BlackRock ETF Trust. It trades about 0.16 of its potential returns per unit of risk. BlackRock ETF Trust is currently generating about 0.05 per unit of risk. If you would invest 2,463 in Global X Funds on August 29, 2024 and sell it today you would earn a total of 1,460 from holding Global X Funds or generate 59.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.05% |
| Values | Daily Returns |
Global X Funds vs. BlackRock ETF Trust
Performance |
| Timeline |
| Global X Funds |
| BlackRock ETF Trust |
Global X and BlackRock ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BlackRock ETF
The main advantage of trading using opposite Global X and BlackRock ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BlackRock ETF 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 BlackRock ETF will offset losses from the drop in BlackRock ETF's long position.| Global X vs. First Trust Exchange Traded | Global X vs. Ultimus Managers Trust | Global X vs. Horizon Kinetics Medical | Global X vs. Harbor Health Care |
| BlackRock ETF vs. Rbb Fund | BlackRock ETF vs. US Treasury 12 | BlackRock ETF vs. Rbb Fund | BlackRock ETF vs. Rbb Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |