Correlation Between Global X and HDAW

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

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

Diversification Opportunities for Global X and HDAW

0.0

Correlation Coefficient

Global X  HDAW

Pay attention - limited upside

The 3 months correlation between Global and HDAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and HDAW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDAW 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 MSCI are associated (or correlated) with HDAW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDAW has no effect on the direction of Global X i.e., Global X and HDAW go up and down completely randomly.

Pair Corralation between Global X and HDAW

If you would invest  1,386  in Global X MSCI on December 27, 2024 and sell it today you would earn a total of  216.50  from holding Global X MSCI or generate 15.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global X MSCI  vs.  HDAW

Global X MSCI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X MSCI are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Global X unveiled solid returns over the last few months and may actually be approaching a breakup point.

HDAW

Risk-Adjusted Performance

Very Weak

Over the last 90 days HDAW has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, HDAW is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Global X and HDAW

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

The idea behind Global X MSCI and HDAW 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.