Correlation Between Global X and Vanguard Real

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

Diversification Opportunities for Global X and Vanguard Real

0.74

Correlation Coefficient

Global X  Vanguard Real

Poor diversification

The 3 months correlation between Global and Vanguard is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and Vanguard Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Real Estate 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 Vanguard Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Real Estate has no effect on the direction of Global X i.e., Global X and Vanguard Real go up and down completely randomly.

Pair Corralation between Global X and Vanguard Real

Given the investment horizon of 90 days Global X SuperDividend is expected to under-perform the Vanguard Real. But the etf apears to be less risky and, when comparing its historical volatility, Global X SuperDividend is 1.29 times less risky than Vanguard Real. The etf trades about -0.21 of its potential returns per unit of risk. The Vanguard Real Estate is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  9,736  in Vanguard Real Estate on September 19, 2024 and sell it today you would lose (813.00) from holding Vanguard Real Estate or give up 8.35% of portfolio value over 90 days.

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

Global X SuperDividend  vs.  Vanguard Real Estate

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 technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Vanguard Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Global X and Vanguard Real

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

The idea behind Global X SuperDividend and Vanguard Real Estate 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.