Correlation Between Global X and Siren Nasdaq

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

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

Diversification Opportunities for Global X and Siren Nasdaq

0.15

Correlation Coefficient

Global X  Siren Nasdaq

Average diversification

The 3 months correlation between Global and Siren is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Siren Nasdaq NexGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siren Nasdaq NexGen 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 Funds are associated (or correlated) with Siren Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siren Nasdaq NexGen has no effect on the direction of Global X i.e., Global X and Siren Nasdaq go up and down completely randomly.

Pair Corralation between Global X and Siren Nasdaq

Considering the 90-day investment horizon Global X Funds is expected to generate 0.5 times more return on investment than Siren Nasdaq. However, Global X Funds is 2.01 times less risky than Siren Nasdaq. It trades about 0.06 of its potential returns per unit of risk. Siren Nasdaq NexGen is currently generating about -0.17 per unit of risk. If you would invest  2,627  in Global X Funds on December 19, 2024 and sell it today you would earn a total of  103.00  from holding Global X Funds or generate 3.92% return on investment over 90 days.

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

Global X Funds  vs.  Siren Nasdaq NexGen

Global X Funds

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global X is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Siren Nasdaq NexGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siren Nasdaq NexGen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Global X and Siren Nasdaq

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

The idea behind Global X Funds and Siren Nasdaq NexGen 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.