Correlation Between Evolve Cryptocurrencies and GLOBAL X

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

By analyzing existing cross correlation between Evolve Cryptocurrencies ETF and GLOBAL X HIGH, you can compare the effects of market volatilities on Evolve Cryptocurrencies 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 Evolve Cryptocurrencies with a short position of GLOBAL X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Cryptocurrencies and GLOBAL X.

Diversification Opportunities for Evolve Cryptocurrencies and GLOBAL X

0.94

Correlation Coefficient

Evolve Cryptocurrencies  GLOBAL X

Almost no diversification

The 3 months correlation between Evolve and GLOBAL is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Cryptocurrencies ETF and GLOBAL X HIGH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL X HIGH and Evolve Cryptocurrencies 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 Evolve Cryptocurrencies ETF 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 HIGH has no effect on the direction of Evolve Cryptocurrencies i.e., Evolve Cryptocurrencies and GLOBAL X go up and down completely randomly.

Pair Corralation between Evolve Cryptocurrencies and GLOBAL X

Assuming the 90 days trading horizon Evolve Cryptocurrencies ETF is expected to generate 181.78 times more return on investment than GLOBAL X. However, Evolve Cryptocurrencies is 181.78 times more volatile than GLOBAL X HIGH. It trades about 0.11 of its potential returns per unit of risk. GLOBAL X HIGH is currently generating about 0.78 per unit of risk. If you would invest  1,345  in Evolve Cryptocurrencies ETF on October 1, 2024 and sell it today you would earn a total of  663.00  from holding Evolve Cryptocurrencies ETF or generate 49.29% return on investment over 90 days.

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

Evolve Cryptocurrencies ETF  vs.  GLOBAL X HIGH

Evolve Cryptocurrencies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Cryptocurrencies ETF are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Evolve Cryptocurrencies displayed solid returns over the last few months and may actually be approaching a breakup point.

GLOBAL X HIGH

Risk-Adjusted Performance

60 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBAL X HIGH are ranked lower than 60 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GLOBAL X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Evolve Cryptocurrencies and GLOBAL X

The main advantage of trading using opposite Evolve Cryptocurrencies and GLOBAL X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolve Cryptocurrencies 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 Evolve Cryptocurrencies ETF and GLOBAL X HIGH 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 Transaction History module to view history of all your transactions and understand their impact on performance.