Correlation Between IShares Russell and Global X

Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell Mid Cap and Global X, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Global X.

Diversification Opportunities for IShares Russell and Global X

0.0

Correlation Coefficient

IShares Russell  Global X

Pay attention - limited upside

The 3 months correlation between IShares and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and Global X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X and IShares Russell 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 Russell Mid Cap 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 has no effect on the direction of IShares Russell i.e., IShares Russell and Global X go up and down completely randomly.

Pair Corralation between IShares Russell and Global X

If you would invest  2,813  in Global X on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Global X or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

iShares Russell Mid Cap  vs.  Global X

iShares Russell Mid

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Russell Mid Cap are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, IShares Russell may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Global X

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global X is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Russell and Global X

The main advantage of trading using opposite IShares Russell and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell Mid Cap and Global X 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..