Correlation Between Iron Mountain and Global X

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

By analyzing existing cross correlation between Iron Mountain Incorporated and Global X Funds, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Global X.

Diversification Opportunities for Iron Mountain and Global X

0.58

Correlation Coefficient

Iron Mountain  Global X

Very weak diversification

The 3 months correlation between Iron and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Iron Mountain 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 Iron Mountain Incorporated 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 Funds has no effect on the direction of Iron Mountain i.e., Iron Mountain and Global X go up and down completely randomly.

Pair Corralation between Iron Mountain and Global X

Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to generate 1.61 times more return on investment than Global X. However, Iron Mountain is 1.61 times more volatile than Global X Funds. It trades about 0.27 of its potential returns per unit of risk. Global X Funds is currently generating about 0.13 per unit of risk. If you would invest  30,816  in Iron Mountain Incorporated on August 25, 2024 and sell it today you would earn a total of  38,190  from holding Iron Mountain Incorporated or generate 123.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.37%
Values	Daily Returns

Iron Mountain Incorporated  vs.  Global X Funds

Iron Mountain

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iron Mountain Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iron Mountain may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Global X Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Iron Mountain and Global X

The main advantage of trading using opposite Iron Mountain and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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 Iron Mountain Incorporated and Global X Funds 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.