Correlation Between Global X and IShares Core
Can any of the company-specific risk be diversified away by investing in both Global X and IShares Core 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 Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Marijuana and iShares Core Equity, you can compare the effects of market volatilities on Global X and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Core.
Diversification Opportunities for Global X and IShares Core
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and IShares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global X Marijuana and iShares Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Equity 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 Marijuana are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Equity has no effect on the direction of Global X i.e., Global X and IShares Core go up and down completely randomly.
Pair Corralation between Global X and IShares Core
Assuming the 90 days trading horizon Global X is expected to generate 1.98 times less return on investment than IShares Core. In addition to that, Global X is 3.5 times more volatile than iShares Core Equity. It trades about 0.02 of its total potential returns per unit of risk. iShares Core Equity is currently generating about 0.16 per unit of volatility. If you would invest 2,530 in iShares Core Equity on October 5, 2024 and sell it today you would earn a total of 882.00 from holding iShares Core Equity or generate 34.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Global X Marijuana vs. iShares Core Equity
Performance |
Timeline |
Global X Marijuana |
iShares Core Equity |
Global X and IShares Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and IShares Core
The main advantage of trading using opposite Global X and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.Global X vs. Global X Equal | Global X vs. Global X Enhanced | Global X vs. Global X Gold | Global X vs. Global X Canadian |
IShares Core vs. Vanguard All Equity ETF | IShares Core vs. iShares Core Growth | IShares Core vs. Vanguard Growth Portfolio | IShares Core vs. TD Global Technology |
Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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