Correlation Between Global X and Dillards
Can any of the company-specific risk be diversified away by investing in both Global X and Dillards 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 Dillards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Dillards, you can compare the effects of market volatilities on Global X and Dillards 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 Dillards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Dillards.
Diversification Opportunities for Global X and Dillards
Poor diversification
The 3 months correlation between Global and Dillards is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Dillards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards 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 Funds are associated (or correlated) with Dillards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards has no effect on the direction of Global X i.e., Global X and Dillards go up and down completely randomly.
Pair Corralation between Global X and Dillards
Given the investment horizon of 90 days Global X Funds is expected to generate 0.29 times more return on investment than Dillards. However, Global X Funds is 3.46 times less risky than Dillards. It trades about 0.19 of its potential returns per unit of risk. Dillards is currently generating about 0.03 per unit of risk. If you would invest 2,468 in Global X Funds on January 24, 2024 and sell it today you would earn a total of 758.00 from holding Global X Funds or generate 30.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.97% |
| Values | Daily Returns |
Global X Funds vs. Dillards
Performance |
| Timeline |
| Global X Funds |
| Dillards |
Global X and Dillards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Dillards
The main advantage of trading using opposite Global X and Dillards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Dillards 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 Dillards will offset losses from the drop in Dillards' long position.| Global X vs. Vanguard Total Stock | Global X vs. SPDR SP 500 | Global X vs. iShares Core SP | Global X vs. Vanguard Total Bond |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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