Correlation Between Global X and Advisors Asset

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

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

Diversification Opportunities for Global X and Advisors Asset

-0.27

Correlation Coefficient

Global X  Advisors Asset

Very good diversification

The 3 months correlation between Global and Advisors is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and Advisors Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Asset Management 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 MSCI are associated (or correlated) with Advisors Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Asset Management has no effect on the direction of Global X i.e., Global X and Advisors Asset go up and down completely randomly.

Pair Corralation between Global X and Advisors Asset

If you would invest  2,429  in Global X MSCI on October 27, 2024 and sell it today you would earn a total of  61.00  from holding Global X MSCI or generate 2.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Global X MSCI  vs.  Advisors Asset Management

Global X MSCI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X MSCI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Advisors Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advisors Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Advisors Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global X and Advisors Asset

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

The idea behind Global X MSCI and Advisors Asset Management 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.