Correlation Between Managed Account and Global X

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

By analyzing existing cross correlation between Managed Account Series and Global X Robotics, you can compare the effects of market volatilities on Managed Account 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 Managed Account with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Managed Account and Global X.

Diversification Opportunities for Managed Account and Global X

-0.5

Correlation Coefficient

Managed Account  Global X

Very good diversification

The 3 months correlation between Managed and Global is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Managed Account Series and Global X Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Robotics and Managed Account 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 Managed Account Series 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 Robotics has no effect on the direction of Managed Account i.e., Managed Account and Global X go up and down completely randomly.

Pair Corralation between Managed Account and Global X

Assuming the 90 days horizon Managed Account Series is expected to under-perform the Global X. But the mutual fund apears to be less risky and, when comparing its historical volatility, Managed Account Series is 5.92 times less risky than Global X. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Global X Robotics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,997  in Global X Robotics on September 4, 2024 and sell it today you would earn a total of  361.00  from holding Global X Robotics or generate 12.05% return on investment over 90 days.

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

Managed Account Series  vs.  Global X Robotics

Managed Account Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Managed Account Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Managed Account is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global X Robotics

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Managed Account and Global X

The main advantage of trading using opposite Managed Account and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Managed Account 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 Managed Account Series and Global X Robotics 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.