Correlation Between EGSHARES BLUE and Global X

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

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

Diversification Opportunities for EGSHARES BLUE and Global X

-0.81

Correlation Coefficient

EGSHARES BLUE  Global X

Pay attention - limited upside

The 3 months correlation between EGSHARES and Global is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding EGSHARES BLUE CHIP and Global X Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Wind and EGSHARES BLUE 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 EGSHARES BLUE CHIP 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 Wind has no effect on the direction of EGSHARES BLUE i.e., EGSHARES BLUE and Global X go up and down completely randomly.

Pair Corralation between EGSHARES BLUE and Global X

Given the investment horizon of 90 days EGSHARES BLUE CHIP is expected to under-perform the Global X. In addition to that, EGSHARES BLUE is 1.45 times more volatile than Global X Wind. It trades about -0.04 of its total potential returns per unit of risk. Global X Wind is currently generating about 0.04 per unit of volatility. If you would invest  1,065  in Global X Wind on December 29, 2024 and sell it today you would earn a total of  30.00  from holding Global X Wind or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

EGSHARES BLUE CHIP  vs.  Global X Wind

EGSHARES BLUE CHIP

Risk-Adjusted Performance

Very Weak

Over the last 90 days EGSHARES BLUE CHIP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, EGSHARES BLUE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Global X Wind

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Wind are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Global X is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EGSHARES BLUE and Global X

The main advantage of trading using opposite EGSHARES BLUE and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGSHARES BLUE 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 EGSHARES BLUE CHIP and Global X Wind 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.