Correlation Between Wasatch Frontier and Global X

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Can any of the company-specific risk be diversified away by investing in both Wasatch Frontier 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 Wasatch Frontier and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Frontier Emerging and Global X, you can compare the effects of market volatilities on Wasatch Frontier 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 Wasatch Frontier with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Frontier and Global X.

Diversification Opportunities for Wasatch Frontier and Global X

-0.74
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Wasatch Frontier and Global X

If you would invest  1,028  in Global X on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Global X or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy1.59%
ValuesDaily Returns

Wasatch Frontier Emerging  vs.  Global X

 Performance 
       Timeline  
Wasatch Frontier Emerging 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wasatch Frontier Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Wasatch Frontier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Global X 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global X has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Wasatch Frontier and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Wasatch Frontier and Global X

The main advantage of trading using opposite Wasatch Frontier and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Frontier 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 Wasatch Frontier Emerging and Global X 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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