Correlation Between ALPS Active and Global X

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

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

Diversification Opportunities for ALPS Active and Global X

0.0

Correlation Coefficient

ALPS Active  Global X

Pay attention - limited upside

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

Pair Corralation between ALPS Active and Global X

If you would invest  2,796  in ALPS Active REIT on November 28, 2024 and sell it today you would earn a total of  22.00  from holding ALPS Active REIT or generate 0.79% return on investment over 90 days.

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

ALPS Active REIT  vs.  Global X Data

ALPS Active REIT

Risk-Adjusted Performance

Very Weak

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

Global X Data

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ALPS Active and Global X

The main advantage of trading using opposite ALPS Active and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALPS Active 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 ALPS Active REIT and Global X Data 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 CEOs Directory module to screen CEOs from public companies around the world.