Correlation Between Global X and IShares Exponential

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

By analyzing existing cross correlation between Global X Robotics and iShares Exponential Technologies, you can compare the effects of market volatilities on Global X and IShares Exponential 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 IShares Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Exponential.

Diversification Opportunities for Global X and IShares Exponential

0.86

Correlation Coefficient

Global X  IShares Exponential

Very poor diversification

The 3 months correlation between Global and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global X Robotics and iShares Exponential Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Exponential 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 Robotics are associated (or correlated) with IShares Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Exponential has no effect on the direction of Global X i.e., Global X and IShares Exponential go up and down completely randomly.

Pair Corralation between Global X and IShares Exponential

Given the investment horizon of 90 days Global X Robotics is expected to generate 1.16 times more return on investment than IShares Exponential. However, Global X is 1.16 times more volatile than iShares Exponential Technologies. It trades about 0.23 of its potential returns per unit of risk. iShares Exponential Technologies is currently generating about 0.06 per unit of risk. If you would invest  3,163  in Global X Robotics on August 26, 2024 and sell it today you would earn a total of  178.00  from holding Global X Robotics or generate 5.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Global X Robotics  vs.  iShares Exponential Technologi

Global X Robotics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Robotics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Global X is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares Exponential

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Exponential Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares Exponential is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global X and IShares Exponential

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

The idea behind Global X Robotics and iShares Exponential Technologies 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.