Correlation Between Global X and TGIF

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

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

Diversification Opportunities for Global X and TGIF

0.0

Correlation Coefficient

Global X  TGIF

Pay attention - limited upside

The 3 months correlation between Global and TGIF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X Nasdaq and TGIF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGIF 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 are associated (or correlated) with TGIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGIF has no effect on the direction of Global X i.e., Global X and TGIF go up and down completely randomly.

Pair Corralation between Global X and TGIF

If you would invest (100.00) in TGIF on December 18, 2024 and sell it today you would earn a total of  100.00  from holding TGIF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global X Nasdaq  vs.  TGIF

Global X Nasdaq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Nasdaq has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Etf's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

TGIF

Risk-Adjusted Performance

Very Weak

Over the last 90 days TGIF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, TGIF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Global X and TGIF

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

The idea behind Global X Nasdaq and TGIF 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.