Correlation Between Global X and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Global X and NYSE Composite 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 NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Seasonal and NYSE Composite, you can compare the effects of market volatilities on Global X and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and NYSE Composite.
Diversification Opportunities for Global X and NYSE Composite
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and NYSE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Global X Seasonal and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 Seasonal are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Global X i.e., Global X and NYSE Composite go up and down completely randomly.
Pair Corralation between Global X and NYSE Composite
Assuming the 90 days trading horizon Global X Seasonal is expected to generate 0.63 times more return on investment than NYSE Composite. However, Global X Seasonal is 1.58 times less risky than NYSE Composite. It trades about -0.07 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.06 per unit of risk. If you would invest 2,987 in Global X Seasonal on February 4, 2024 and sell it today you would lose (22.00) from holding Global X Seasonal or give up 0.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Global X Seasonal vs. NYSE Composite
Performance |
Timeline |
Global X and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Global X Seasonal
Pair trading matchups for Global X
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Global X and NYSE Composite
The main advantage of trading using opposite Global X and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Global X vs. Sprott Physical Uranium | Global X vs. Global X Lithium | Global X vs. Global Atomic Corp | Global X vs. NexGen Energy |
NYSE Composite vs. The Cheesecake Factory | NYSE Composite vs. Vector Group | NYSE Composite vs. Ecolab Inc | NYSE Composite vs. Dine Brands Global |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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