Correlation Between Global X and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Global X and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Social and SPDR SP Telecom, you can compare the effects of market volatilities on Global X and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SPDR SP.
Diversification Opportunities for Global X and SPDR SP
Almost no diversification
The 3 months correlation between Global and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Global X Social and SPDR SP Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Telecom 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 Social are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Telecom has no effect on the direction of Global X i.e., Global X and SPDR SP go up and down completely randomly.
Pair Corralation between Global X and SPDR SP
Given the investment horizon of 90 days Global X Social is expected to generate 1.04 times more return on investment than SPDR SP. However, Global X is 1.04 times more volatile than SPDR SP Telecom. It trades about 0.14 of its potential returns per unit of risk. SPDR SP Telecom is currently generating about 0.12 per unit of risk. If you would invest 4,384 in Global X Social on March 30, 2025 and sell it today you would earn a total of 900.00 from holding Global X Social or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Social vs. SPDR SP Telecom
Performance |
| Timeline |
| Global X Social |
| SPDR SP Telecom |
Global X and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SPDR SP
The main advantage of trading using opposite Global X and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Global X vs. Global X Millennials | Global X vs. First Trust Cloud | Global X vs. Global X FinTech | Global X vs. Invesco NASDAQ Internet |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Transportation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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