Correlation Between FundX ETF and Global X
Can any of the company-specific risk be diversified away by investing in both FundX ETF 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 FundX ETF and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FundX ETF and Global X SP, you can compare the effects of market volatilities on FundX ETF 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 FundX ETF with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of FundX ETF and Global X.
Diversification Opportunities for FundX ETF and Global X
No risk reduction
The 3 months correlation between FundX and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding FundX ETF and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP and FundX ETF 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 FundX ETF 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 SP has no effect on the direction of FundX ETF i.e., FundX ETF and Global X go up and down completely randomly.
Pair Corralation between FundX ETF and Global X
Given the investment horizon of 90 days FundX ETF is expected to generate 1.15 times more return on investment than Global X. However, FundX ETF is 1.15 times more volatile than Global X SP. It trades about 0.35 of its potential returns per unit of risk. Global X SP is currently generating about 0.34 per unit of risk. If you would invest 6,776 in FundX ETF on September 4, 2024 and sell it today you would earn a total of 446.00 from holding FundX ETF or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FundX ETF vs. Global X SP
Performance |
| Timeline |
| FundX ETF |
| Global X SP |
FundX ETF and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FundX ETF and Global X
The main advantage of trading using opposite FundX ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FundX ETF 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.| FundX ETF vs. Vanguard Growth Index | FundX ETF vs. iShares Russell 1000 | FundX ETF vs. iShares Core SP | FundX ETF vs. Vanguard Mega Cap |
| Global X vs. SMI 3Fourteen Full Cycle | Global X vs. UBS AG London | Global X vs. Global X SP | Global X vs. FundX ETF |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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