Correlation Between IShares Silver and Global X

Can any of the company-specific risk be diversified away by investing in both IShares Silver 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 Silver 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 Silver Bullion and Global X Silver, you can compare the effects of market volatilities on IShares Silver 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 Silver with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and Global X.

Diversification Opportunities for IShares Silver and Global X

0.99

Correlation Coefficient

IShares Silver  Global X

No risk reduction

The 3 months correlation between IShares and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Bullion and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver and IShares Silver 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 Silver Bullion 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 Silver has no effect on the direction of IShares Silver i.e., IShares Silver and Global X go up and down completely randomly.

Pair Corralation between IShares Silver and Global X

Assuming the 90 days trading horizon IShares Silver is expected to generate 1.22 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Silver Bullion is 1.03 times less risky than Global X. It trades about 0.01 of its potential returns per unit of risk. Global X Silver is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,375  in Global X Silver on September 14, 2024 and sell it today you would earn a total of  5.00  from holding Global X Silver or generate 0.36% return on investment over 90 days.

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

iShares Silver Bullion  vs.  Global X Silver

iShares Silver Bullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Silver Bullion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Silver is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global X Silver

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Silver and Global X

The main advantage of trading using opposite IShares Silver and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver 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 Silver Bullion and Global X Silver 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.