Correlation Between DBX ETF and Global X

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

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

Diversification Opportunities for DBX ETF and Global X

0.74

Correlation Coefficient

DBX ETF  Global X

Poor diversification

The 3 months correlation between DBX and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and Global X Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Copper and DBX ETF 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 DBX ETF Trust 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 Copper has no effect on the direction of DBX ETF i.e., DBX ETF and Global X go up and down completely randomly.

Pair Corralation between DBX ETF and Global X

Given the investment horizon of 90 days DBX ETF Trust is expected to generate 0.49 times more return on investment than Global X. However, DBX ETF Trust is 2.06 times less risky than Global X. It trades about -0.37 of its potential returns per unit of risk. Global X Copper is currently generating about -0.25 per unit of risk. If you would invest  2,717  in DBX ETF Trust on October 12, 2024 and sell it today you would lose (144.00) from holding DBX ETF Trust or give up 5.3% of portfolio value over 90 days.

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

DBX ETF Trust  vs.  Global X Copper

DBX ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DBX ETF Trust 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 sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Global X Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with DBX ETF and Global X

The main advantage of trading using opposite DBX ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF 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 DBX ETF Trust and Global X Copper 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.