Correlation Between ETFMG Prime and Global X
Can any of the company-specific risk be diversified away by investing in both ETFMG Prime 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 ETFMG Prime and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFMG Prime Mobile and Global X Robotics, you can compare the effects of market volatilities on ETFMG Prime 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 ETFMG Prime with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFMG Prime and Global X.
Diversification Opportunities for ETFMG Prime and Global X
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFMG and Global is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ETFMG Prime Mobile and Global X Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Robotics and ETFMG Prime 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 ETFMG Prime Mobile 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 Robotics has no effect on the direction of ETFMG Prime i.e., ETFMG Prime and Global X go up and down completely randomly.
Pair Corralation between ETFMG Prime and Global X
Given the investment horizon of 90 days ETFMG Prime Mobile is expected to under-perform the Global X. In addition to that, ETFMG Prime is 1.08 times more volatile than Global X Robotics. It trades about -0.06 of its total potential returns per unit of risk. Global X Robotics is currently generating about 0.21 per unit of volatility. If you would invest 3,027 in Global X Robotics on February 27, 2024 and sell it today you would earn a total of 126.00 from holding Global X Robotics or generate 4.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ETFMG Prime Mobile vs. Global X Robotics
Performance |
Timeline |
ETFMG Prime Mobile |
Global X Robotics |
ETFMG Prime and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ETFMG Prime and Global X
The main advantage of trading using opposite ETFMG Prime and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFMG Prime 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.ETFMG Prime vs. iShares Global Clean | ETFMG Prime vs. Invesco WilderHill Clean | ETFMG Prime vs. Global X Lithium | ETFMG Prime vs. SCOR PK |
Global X vs. iShares Global Clean | Global X vs. Invesco WilderHill Clean | Global X vs. Global X Lithium | Global X vs. SCOR PK |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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