Correlation Between Global X and Accelerate OneChoice

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

By analyzing existing cross correlation between Global X NASDAQ 100 and Accelerate OneChoice Alternative, you can compare the effects of market volatilities on Global X and Accelerate OneChoice 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 Accelerate OneChoice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Accelerate OneChoice.

Diversification Opportunities for Global X and Accelerate OneChoice

0.62

Correlation Coefficient

Global X  Accelerate OneChoice

Poor diversification

The 3 months correlation between Global and Accelerate is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Global X NASDAQ 100 and Accelerate OneChoice Alternati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate OneChoice 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 NASDAQ 100 are associated (or correlated) with Accelerate OneChoice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate OneChoice has no effect on the direction of Global X i.e., Global X and Accelerate OneChoice go up and down completely randomly.

Pair Corralation between Global X and Accelerate OneChoice

Assuming the 90 days trading horizon Global X NASDAQ 100 is expected to generate 2.61 times more return on investment than Accelerate OneChoice. However, Global X is 2.61 times more volatile than Accelerate OneChoice Alternative. It trades about 0.16 of its potential returns per unit of risk. Accelerate OneChoice Alternative is currently generating about 0.1 per unit of risk. If you would invest  8,092  in Global X NASDAQ 100 on October 25, 2024 and sell it today you would earn a total of  917.00  from holding Global X NASDAQ 100 or generate 11.33% return on investment over 90 days.

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

Global X NASDAQ 100  vs.  Accelerate OneChoice Alternati

Global X NASDAQ

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X NASDAQ 100 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Accelerate OneChoice

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accelerate OneChoice Alternative are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Accelerate OneChoice 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 Accelerate OneChoice

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

The idea behind Global X NASDAQ 100 and Accelerate OneChoice Alternative 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.