Correlation Between IShares Self and Global X

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

By analyzing existing cross correlation between iShares Self Driving EV and Global X Autonomous, you can compare the effects of market volatilities on IShares Self 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 IShares Self with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Self and Global X.

Diversification Opportunities for IShares Self and Global X

0.08

Correlation Coefficient

IShares Self  Global X

Significant diversification

The 3 months correlation between IShares and Global is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding iShares Self Driving EV and Global X Autonomous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Autonomous and IShares Self 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 iShares Self Driving EV 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 Autonomous has no effect on the direction of IShares Self i.e., IShares Self and Global X go up and down completely randomly.

Pair Corralation between IShares Self and Global X

Given the investment horizon of 90 days iShares Self Driving EV is expected to under-perform the Global X. In addition to that, IShares Self is 1.19 times more volatile than Global X Autonomous. It trades about -0.02 of its total potential returns per unit of risk. Global X Autonomous is currently generating about 0.0 per unit of volatility. If you would invest  2,327  in Global X Autonomous on October 5, 2024 and sell it today you would lose (31.00) from holding Global X Autonomous or give up 1.33% of portfolio value over 90 days.

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

iShares Self Driving EV  vs.  Global X Autonomous

iShares Self Driving

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Self Driving EV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Global X Autonomous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Autonomous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Global X is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares Self and Global X

The main advantage of trading using opposite IShares Self and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Self 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 iShares Self Driving EV and Global X Autonomous 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.