Correlation Between Global X and NEOS Nasdaq

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

By analyzing existing cross correlation between Global X SP and NEOS Nasdaq 100, you can compare the effects of market volatilities on Global X and NEOS Nasdaq 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 NEOS Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and NEOS Nasdaq.

Diversification Opportunities for Global X and NEOS Nasdaq

0.0

Correlation Coefficient

Global X  NEOS Nasdaq

Pay attention - limited upside

The 3 months correlation between Global and NEOS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X SP and NEOS Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS Nasdaq 100 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 SP are associated (or correlated) with NEOS Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS Nasdaq 100 has no effect on the direction of Global X i.e., Global X and NEOS Nasdaq go up and down completely randomly.

Pair Corralation between Global X and NEOS Nasdaq

If you would invest (100.00) in NEOS Nasdaq 100 on December 28, 2024 and sell it today you would earn a total of  100.00  from holding NEOS Nasdaq 100 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

Global X SP  vs.  NEOS Nasdaq 100

Global X SP

Risk-Adjusted Performance

Very Weak

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

NEOS Nasdaq 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEOS Nasdaq 100 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, NEOS Nasdaq is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Global X and NEOS Nasdaq

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

The idea behind Global X SP and NEOS Nasdaq 100 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.