Correlation Between Global X and IShares Exponential

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

By analyzing existing cross correlation between Global X Autonomous and iShares Exponential Technologies, you can compare the effects of market volatilities on Global X and IShares Exponential 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 IShares Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Exponential.

Diversification Opportunities for Global X and IShares Exponential

0.78

Correlation Coefficient

Global X  IShares Exponential

Poor diversification

The 3 months correlation between Global and IShares is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Global X Autonomous and iShares Exponential Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Exponential 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 Autonomous are associated (or correlated) with IShares Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Exponential has no effect on the direction of Global X i.e., Global X and IShares Exponential go up and down completely randomly.

Pair Corralation between Global X and IShares Exponential

Given the investment horizon of 90 days Global X Autonomous is expected to generate 1.23 times more return on investment than IShares Exponential. However, Global X is 1.23 times more volatile than iShares Exponential Technologies. It trades about -0.03 of its potential returns per unit of risk. iShares Exponential Technologies is currently generating about -0.12 per unit of risk. If you would invest  2,392  in Global X Autonomous on October 10, 2024 and sell it today you would lose (24.00) from holding Global X Autonomous or give up 1.0% of portfolio value over 90 days.

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

Global X Autonomous  vs.  iShares Exponential Technologi

Global X Autonomous

Risk-Adjusted Performance

3 of 100

Insignificant

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

iShares Exponential

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Exponential Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares Exponential is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global X and IShares Exponential

The main advantage of trading using opposite Global X and IShares Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Exponential 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 IShares Exponential will offset losses from the drop in IShares Exponential's long position.

The idea behind Global X Autonomous and iShares Exponential Technologies 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.