Correlation Between Bondbloxx ETF and Global X

Can any of the company-specific risk be diversified away by investing in both Bondbloxx 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 Bondbloxx 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 Bondbloxx ETF Trust and Global X Short Term, you can compare the effects of market volatilities on Bondbloxx 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 Bondbloxx ETF with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Global X.

Diversification Opportunities for Bondbloxx ETF and Global X

0.68

Correlation Coefficient

Bondbloxx ETF  Global X

Poor diversification

The 3 months correlation between Bondbloxx and Global is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Global X Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Short and Bondbloxx 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 Bondbloxx 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 Short has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Global X go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Global X

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 2.1 times more return on investment than Global X. However, Bondbloxx ETF is 2.1 times more volatile than Global X Short Term. It trades about 0.13 of its potential returns per unit of risk. Global X Short Term is currently generating about 0.1 per unit of risk. If you would invest  4,717  in Bondbloxx ETF Trust on September 12, 2024 and sell it today you would earn a total of  203.00  from holding Bondbloxx ETF Trust or generate 4.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	26.21%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Global X Short Term

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Global X Short

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Short Term are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bondbloxx ETF and Global X

The main advantage of trading using opposite Bondbloxx ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx 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 Bondbloxx ETF Trust and Global X Short Term 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.