Correlation Between IShares Treasury and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Treasury and Global X 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 IShares Treasury and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Treasury Floating and Global X Funds, you can compare the effects of market volatilities on IShares Treasury and Global X 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 IShares Treasury with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and Global X.
Diversification Opportunities for IShares Treasury and Global X
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Global is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Floating and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and IShares Treasury 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 iShares Treasury Floating are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of IShares Treasury i.e., IShares Treasury and Global X go up and down completely randomly.
Pair Corralation between IShares Treasury and Global X
Given the investment horizon of 90 days IShares Treasury is expected to generate 1.03 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Treasury Floating is 1.17 times less risky than Global X. It trades about 1.02 of its potential returns per unit of risk. Global X Funds is currently generating about 0.89 of returns per unit of risk over similar time horizon. If you would invest 9,801 in Global X Funds on September 3, 2024 and sell it today you would earn a total of 245.00 from holding Global X Funds or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Treasury Floating vs. Global X Funds
Performance |
| Timeline |
| iShares Treasury Floating |
| Global X Funds |
IShares Treasury and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Treasury and Global X
The main advantage of trading using opposite IShares Treasury and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| IShares Treasury vs. WisdomTree Floating Rate | IShares Treasury vs. iShares 0 3 Month | IShares Treasury vs. iShares Ultra Short Term | IShares Treasury vs. iShares Floating Rate |
| Global X vs. Global X Funds | Global X vs. US Treasury 12 | Global X vs. Tidal Trust II | Global X vs. Franklin Liberty Treasury |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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