Correlation Between Real Estate and Global X

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

By analyzing existing cross correlation between Real Estate E Commerce and Global X NASDAQ 100, you can compare the effects of market volatilities on Real Estate 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 Real Estate with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and Global X.

Diversification Opportunities for Real Estate and Global X

0.51

Correlation Coefficient

Real Estate  Global X

Very weak diversification

The 3 months correlation between Real and Global is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate E Commerce and Global X NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ and Real Estate 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 Real Estate E Commerce 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 NASDAQ has no effect on the direction of Real Estate i.e., Real Estate and Global X go up and down completely randomly.

Pair Corralation between Real Estate and Global X

Assuming the 90 days horizon Real Estate E Commerce is expected to under-perform the Global X. In addition to that, Real Estate is 1.21 times more volatile than Global X NASDAQ 100. It trades about -0.19 of its total potential returns per unit of risk. Global X NASDAQ 100 is currently generating about -0.09 per unit of volatility. If you would invest  1,290  in Global X NASDAQ 100 on December 29, 2024 and sell it today you would lose (94.00) from holding Global X NASDAQ 100 or give up 7.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Real Estate E Commerce  vs.  Global X NASDAQ 100

Real Estate E

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Estate E Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Global X NASDAQ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X NASDAQ 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Real Estate and Global X

The main advantage of trading using opposite Real Estate and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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 Real Estate E Commerce and Global X NASDAQ 100 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.