Correlation Between Global X and Xtrackers Emerging
Can any of the company-specific risk be diversified away by investing in both Global X and Xtrackers Emerging 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 Xtrackers Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SuperDividend and Xtrackers Emerging Markets, you can compare the effects of market volatilities on Global X and Xtrackers Emerging 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 Xtrackers Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Xtrackers Emerging.
Diversification Opportunities for Global X and Xtrackers Emerging
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Xtrackers is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and Xtrackers Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Emerging 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 SuperDividend are associated (or correlated) with Xtrackers Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Emerging has no effect on the direction of Global X i.e., Global X and Xtrackers Emerging go up and down completely randomly.
Pair Corralation between Global X and Xtrackers Emerging
Given the investment horizon of 90 days Global X SuperDividend is expected to generate 0.7 times more return on investment than Xtrackers Emerging. However, Global X SuperDividend is 1.42 times less risky than Xtrackers Emerging. It trades about -0.1 of its potential returns per unit of risk. Xtrackers Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 2,151 in Global X SuperDividend on September 13, 2024 and sell it today you would lose (71.00) from holding Global X SuperDividend or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SuperDividend vs. Xtrackers Emerging Markets
Performance |
| Timeline |
| Global X SuperDividend |
| Xtrackers Emerging |
Global X and Xtrackers Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Xtrackers Emerging
The main advantage of trading using opposite Global X and Xtrackers Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Xtrackers Emerging 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 Xtrackers Emerging will offset losses from the drop in Xtrackers Emerging's long position.| Global X vs. Vanguard Real Estate | Global X vs. Howard Hughes | Global X vs. The Real Estate | Global X vs. Site Centers Corp |
| Xtrackers Emerging vs. Global X MSCI | Xtrackers Emerging vs. Global X Alternative | Xtrackers Emerging vs. iShares Emerging Markets | Xtrackers Emerging vs. Global X SuperDividend |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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