Correlation Between Global X and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Global X and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Global X and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Via Renewables.
Diversification Opportunities for Global X and Via Renewables
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Via is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Global X i.e., Global X and Via Renewables go up and down completely randomly.
Pair Corralation between Global X and Via Renewables
Given the investment horizon of 90 days Global X Funds is expected to generate 0.56 times more return on investment than Via Renewables. However, Global X Funds is 1.79 times less risky than Via Renewables. It trades about -0.04 of its potential returns per unit of risk. Via Renewables is currently generating about -0.07 per unit of risk. If you would invest 3,126 in Global X Funds on February 4, 2024 and sell it today you would lose (37.00) from holding Global X Funds or give up 1.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global X Funds vs. Via Renewables
Performance |
Timeline |
Global X Funds |
Via Renewables |
Global X and Via Renewables Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and Via Renewables
The main advantage of trading using opposite Global X and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' 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 |
Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp | Via Renewables vs. Aquagold International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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