Correlation Between Apartment Investment and Global X

Can any of the company-specific risk be diversified away by investing in both Apartment Investment 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 Apartment Investment and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apartment Investment and and Global X Funds, you can compare the effects of market volatilities on Apartment Investment 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 Apartment Investment with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Investment and Global X.

Diversification Opportunities for Apartment Investment and Global X

0.02

Correlation Coefficient

Apartment Investment  Global X

Significant diversification

The 3 months correlation between Apartment and Global is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Investment and 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 Apartment Investment 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 Apartment Investment and 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 Apartment Investment i.e., Apartment Investment and Global X go up and down completely randomly.

Pair Corralation between Apartment Investment and Global X

Assuming the 90 days trading horizon Apartment Investment is expected to generate 13.93 times less return on investment than Global X. In addition to that, Apartment Investment is 1.04 times more volatile than Global X Funds. It trades about 0.01 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.09 per unit of volatility. If you would invest  4,490  in Global X Funds on August 31, 2024 and sell it today you would earn a total of  397.00  from holding Global X Funds or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apartment Investment and  vs.  Global X Funds

Apartment Investment and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apartment Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Apartment Investment is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Global X Funds

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Apartment Investment and Global X

The main advantage of trading using opposite Apartment Investment and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apartment Investment 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.

The idea behind Apartment Investment and and Global X Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.