Correlation Between Global X and Kurv Yield

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

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

Diversification Opportunities for Global X and Kurv Yield

0.92

Correlation Coefficient

Global X  Kurv Yield

Almost no diversification

The 3 months correlation between Global and Kurv is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Global X Russell and Kurv Yield Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kurv Yield Premium 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 Russell are associated (or correlated) with Kurv Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kurv Yield Premium has no effect on the direction of Global X i.e., Global X and Kurv Yield go up and down completely randomly.

Pair Corralation between Global X and Kurv Yield

Given the investment horizon of 90 days Global X is expected to generate 2.07 times less return on investment than Kurv Yield. But when comparing it to its historical volatility, Global X Russell is 2.35 times less risky than Kurv Yield. It trades about 0.19 of its potential returns per unit of risk. Kurv Yield Premium is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,691  in Kurv Yield Premium on September 1, 2024 and sell it today you would earn a total of  434.00  from holding Kurv Yield Premium or generate 16.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Global X Russell  vs.  Kurv Yield Premium

Global X Russell

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Russell are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Kurv Yield Premium

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kurv Yield Premium are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Kurv Yield reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and Kurv Yield

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

The idea behind Global X Russell and Kurv Yield Premium 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.