Correlation Between Global X and VanEck Mortgage

Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Mortgage 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 VanEck Mortgage 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 VanEck Mortgage REIT, you can compare the effects of market volatilities on Global X and VanEck Mortgage 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 VanEck Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Mortgage.

Diversification Opportunities for Global X and VanEck Mortgage

0.65

Correlation Coefficient

Global X  VanEck Mortgage

Poor diversification

The 3 months correlation between Global and VanEck is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and VanEck Mortgage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Mortgage REIT 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 VanEck Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Mortgage REIT has no effect on the direction of Global X i.e., Global X and VanEck Mortgage go up and down completely randomly.

Pair Corralation between Global X and VanEck Mortgage

Given the investment horizon of 90 days Global X SuperDividend is expected to generate 0.79 times more return on investment than VanEck Mortgage. However, Global X SuperDividend is 1.26 times less risky than VanEck Mortgage. It trades about 0.16 of its potential returns per unit of risk. VanEck Mortgage REIT is currently generating about 0.12 per unit of risk. If you would invest  1,952  in Global X SuperDividend on December 28, 2024 and sell it today you would earn a total of  166.00  from holding Global X SuperDividend or generate 8.5% return on investment over 90 days.

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

Global X SuperDividend  vs.  VanEck Mortgage REIT

Global X SuperDividend

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SuperDividend are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in April 2025.

VanEck Mortgage REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Mortgage REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, VanEck Mortgage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Global X and VanEck Mortgage

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

The idea behind Global X SuperDividend and VanEck Mortgage REIT 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.