Correlation Between Global X and Evolve Enhanced

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

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

Diversification Opportunities for Global X and Evolve Enhanced

-0.69

Correlation Coefficient

Global X  Evolve Enhanced

Excellent diversification

The 3 months correlation between Global and Evolve is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Global X Big and Evolve Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Enhanced Yield 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 Big are associated (or correlated) with Evolve Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Enhanced Yield has no effect on the direction of Global X i.e., Global X and Evolve Enhanced go up and down completely randomly.

Pair Corralation between Global X and Evolve Enhanced

Assuming the 90 days trading horizon Global X Big is expected to under-perform the Evolve Enhanced. In addition to that, Global X is 3.93 times more volatile than Evolve Enhanced Yield. It trades about -0.09 of its total potential returns per unit of risk. Evolve Enhanced Yield is currently generating about 0.07 per unit of volatility. If you would invest  1,825  in Evolve Enhanced Yield on December 30, 2024 and sell it today you would earn a total of  55.00  from holding Evolve Enhanced Yield or generate 3.01% return on investment over 90 days.

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

Global X Big  vs.  Evolve Enhanced Yield

Global X Big

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Big has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic 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.

Evolve Enhanced Yield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Enhanced Yield are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Evolve Enhanced is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global X and Evolve Enhanced

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

The idea behind Global X Big and Evolve Enhanced Yield 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.