Correlation Between Global X and Vident International
Can any of the company-specific risk be diversified away by investing in both Global X and Vident International 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 Vident International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Alternative and Vident International Equity, you can compare the effects of market volatilities on Global X and Vident International 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 Vident International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Vident International.
Diversification Opportunities for Global X and Vident International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Vident is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global X Alternative and Vident International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vident International 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 Alternative are associated (or correlated) with Vident International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vident International has no effect on the direction of Global X i.e., Global X and Vident International go up and down completely randomly.
Pair Corralation between Global X and Vident International
Given the investment horizon of 90 days Global X Alternative is expected to generate 0.76 times more return on investment than Vident International. However, Global X Alternative is 1.31 times less risky than Vident International. It trades about 0.05 of its potential returns per unit of risk. Vident International Equity is currently generating about 0.03 per unit of risk. If you would invest 1,177 in Global X Alternative on December 4, 2024 and sell it today you would earn a total of 17.00 from holding Global X Alternative or generate 1.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Global X Alternative vs. Vident International Equity
Performance |
Timeline |
Global X Alternative |
Vident International |
Global X and Vident International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and Vident International
The main advantage of trading using opposite Global X and Vident International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Vident International 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 Vident International will offset losses from the drop in Vident International's long position.Global X vs. First Trust Multi Asset | Global X vs. Collaborative Investment Series | Global X vs. Northern Lights | Global X vs. Akros Monthly Payout |
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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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