Correlation Between SP 500 and Global X

Can any of the company-specific risk be diversified away by investing in both SP 500 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 SP 500 and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SP 500 VIX and Global X Infrastructure, you can compare the effects of market volatilities on SP 500 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 SP 500 with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and Global X.

Diversification Opportunities for SP 500 and Global X

0.0

Correlation Coefficient

SP 500  Global X

Pay attention - limited upside

The 3 months correlation between VILX and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 VIX and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure and SP 500 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 SP 500 VIX 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 Infrastructure has no effect on the direction of SP 500 i.e., SP 500 and Global X go up and down completely randomly.

Pair Corralation between SP 500 and Global X

If you would invest (100.00) in SP 500 VIX on December 30, 2024 and sell it today you would earn a total of  100.00  from holding SP 500 VIX or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SP 500 VIX  vs.  Global X Infrastructure

SP 500 VIX

Risk-Adjusted Performance

Insignificant

Over the last 90 days SP 500 VIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SP 500 is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Global X Infrastructure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic 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.

Pair Trading with SP 500 and Global X

The main advantage of trading using opposite SP 500 and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 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 SP 500 VIX and Global X Infrastructure 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.