Correlation Between IShares Trust and Global X

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

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

Diversification Opportunities for IShares Trust and Global X

-0.41

Correlation Coefficient

IShares Trust  Global X

Very good diversification

The 3 months correlation between IShares and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Global X Psychedelic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Psychedelic and IShares Trust 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 iShares Trust 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 Psychedelic has no effect on the direction of IShares Trust i.e., IShares Trust and Global X go up and down completely randomly.

Pair Corralation between IShares Trust and Global X

If you would invest  570.00  in Global X Psychedelic on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Global X Psychedelic or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

iShares Trust  vs.  Global X Psychedelic

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global X Psychedelic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Psychedelic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Trust and Global X

The main advantage of trading using opposite IShares Trust and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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 iShares Trust and Global X Psychedelic 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.