Correlation Between IShares IBoxx and Global X
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx 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 IBoxx 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 iBoxx Investment and Global X SuperIncome, you can compare the effects of market volatilities on IShares IBoxx 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 IBoxx with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and Global X.
Diversification Opportunities for IShares IBoxx and Global X
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Global is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment and Global X SuperIncome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperIncome and IShares IBoxx 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 iBoxx Investment 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 SuperIncome has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and Global X go up and down completely randomly.
Pair Corralation between IShares IBoxx and Global X
Considering the 90-day investment horizon iShares iBoxx Investment is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, iShares iBoxx Investment is 1.03 times less risky than Global X. The etf trades about -0.13 of its potential returns per unit of risk. The Global X SuperIncome is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 968.00 in Global X SuperIncome on September 25, 2024 and sell it today you would lose (29.00) from holding Global X SuperIncome or give up 3.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
iShares iBoxx Investment vs. Global X SuperIncome
Performance |
Timeline |
iShares iBoxx Investment |
Global X SuperIncome |
IShares IBoxx and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares IBoxx and Global X
The main advantage of trading using opposite IShares IBoxx and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx 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.IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 Year |
Global X vs. Freedom Day Dividend | Global X vs. Franklin Templeton ETF | Global X vs. iShares MSCI China | Global X vs. Tidal Trust II |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |