Correlation Between VIIX and Global X
Can any of the company-specific risk be diversified away by investing in both VIIX 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 VIIX and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIIX and Global X Funds, you can compare the effects of market volatilities on VIIX 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 VIIX with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIIX and Global X.
Diversification Opportunities for VIIX and Global X
Very poor diversification
The 3 months correlation between VIIX and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VIIX 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 VIIX 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 VIIX 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 VIIX i.e., VIIX and Global X go up and down completely randomly.
Pair Corralation between VIIX and Global X
Given the investment horizon of 90 days VIIX is expected to under-perform the Global X. In addition to that, VIIX is 4.07 times more volatile than Global X Funds. It trades about -0.15 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.08 per unit of volatility. If you would invest 2,494 in Global X Funds on September 3, 2024 and sell it today you would earn a total of 598.00 from holding Global X Funds or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 46.77% |
| Values | Daily Returns |
VIIX vs. Global X Funds
Performance |
| Timeline |
| VIIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global X Funds |
VIIX and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIIX and Global X
The main advantage of trading using opposite VIIX and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIIX 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.| VIIX vs. FT Vest Equity | VIIX vs. Zillow Group Class | VIIX vs. Northern Lights | VIIX vs. VanEck Vectors Moodys |
| Global X vs. Freedom Day Dividend | Global X vs. iShares MSCI China | Global X vs. SmartETFs Dividend Builder | Global X vs. Tidal ETF Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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