Correlation Between Global X and AdvisorShares Gerber

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

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

Diversification Opportunities for Global X and AdvisorShares Gerber

0.7

Correlation Coefficient

Global X  AdvisorShares Gerber

Poor diversification

The 3 months correlation between Global and AdvisorShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global X Disruptive and AdvisorShares Gerber Kawasaki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Gerber 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 Disruptive are associated (or correlated) with AdvisorShares Gerber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Gerber has no effect on the direction of Global X i.e., Global X and AdvisorShares Gerber go up and down completely randomly.

Pair Corralation between Global X and AdvisorShares Gerber

Given the investment horizon of 90 days Global X Disruptive is expected to generate 2.66 times more return on investment than AdvisorShares Gerber. However, Global X is 2.66 times more volatile than AdvisorShares Gerber Kawasaki. It trades about 0.14 of its potential returns per unit of risk. AdvisorShares Gerber Kawasaki is currently generating about 0.18 per unit of risk. If you would invest  1,297  in Global X Disruptive on September 4, 2024 and sell it today you would earn a total of  291.00  from holding Global X Disruptive or generate 22.44% return on investment over 90 days.

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

Global X Disruptive  vs.  AdvisorShares Gerber Kawasaki

Global X Disruptive

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Disruptive are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global X unveiled solid returns over the last few months and may actually be approaching a breakup point.

AdvisorShares Gerber

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Gerber Kawasaki are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, AdvisorShares Gerber may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global X and AdvisorShares Gerber

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

The idea behind Global X Disruptive and AdvisorShares Gerber Kawasaki 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.