Correlation Between Global X and SPACE

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

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

Diversification Opportunities for Global X and SPACE

-0.47

Correlation Coefficient

Global X  SPACE

Very good diversification

The 3 months correlation between Global and SPACE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SuperDividend are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Global X i.e., Global X and SPACE go up and down completely randomly.

Pair Corralation between Global X and SPACE

Given the investment horizon of 90 days Global X SuperDividend is expected to generate 0.12 times more return on investment than SPACE. However, Global X SuperDividend is 8.19 times less risky than SPACE. It trades about -0.14 of its potential returns per unit of risk. SPACE is currently generating about -0.19 per unit of risk. If you would invest  2,124  in Global X SuperDividend on October 5, 2024 and sell it today you would lose (52.00) from holding Global X SuperDividend or give up 2.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Global X SuperDividend  vs.  SPACE

Global X SuperDividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

SPACE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and SPACE

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

The idea behind Global X SuperDividend and SPACE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.