Correlation Between Global X and BFIT

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

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

Diversification Opportunities for Global X and BFIT

0.11

Correlation Coefficient

Global X  BFIT

Average diversification

The 3 months correlation between Global and BFIT is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global X E commerce and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT 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 E commerce are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Global X i.e., Global X and BFIT go up and down completely randomly.

Pair Corralation between Global X and BFIT

If you would invest  2,477  in Global X E commerce on September 18, 2024 and sell it today you would earn a total of  471.00  from holding Global X E commerce or generate 19.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Global X E commerce  vs.  BFIT

Global X E

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X E commerce are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Global X showed solid returns over the last few months and may actually be approaching a breakup point.

BFIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BFIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BFIT 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 BFIT

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

The idea behind Global X E commerce and BFIT 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.