Correlation Between Robo Global and Global X

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

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

Diversification Opportunities for Robo Global and Global X

0.71

Correlation Coefficient

Robo Global  Global X

Poor diversification

The 3 months correlation between Robo and Global is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Robo Global Robotics and Global X Cybersecurity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Cybersecurity and Robo Global 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 Robo Global Robotics 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 Cybersecurity has no effect on the direction of Robo Global i.e., Robo Global and Global X go up and down completely randomly.

Pair Corralation between Robo Global and Global X

Given the investment horizon of 90 days Robo Global Robotics is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Robo Global Robotics is 1.11 times less risky than Global X. The etf trades about -0.01 of its potential returns per unit of risk. The Global X Cybersecurity is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,385  in Global X Cybersecurity on December 17, 2024 and sell it today you would lose (23.00) from holding Global X Cybersecurity or give up 0.68% of portfolio value over 90 days.

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

Robo Global Robotics  vs.  Global X Cybersecurity

Robo Global Robotics

Risk-Adjusted Performance

Very Weak

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

Global X Cybersecurity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Robo Global and Global X

The main advantage of trading using opposite Robo Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robo Global 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 Robo Global Robotics and Global X Cybersecurity 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.