Correlation Between Gx US and Flexshares Global

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Gx US and Flexshares Global 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 Gx US and Flexshares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gx US Infrastructure and Flexshares Global Broad, you can compare the effects of market volatilities on Gx US and Flexshares Global 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 Gx US with a short position of Flexshares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gx US and Flexshares Global.

Diversification Opportunities for Gx US and Flexshares Global

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Gx US and Flexshares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gx US Infrastructure and Flexshares Global Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexshares Global Broad and Gx US 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 Gx US Infrastructure are associated (or correlated) with Flexshares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexshares Global Broad has no effect on the direction of Gx US i.e., Gx US and Flexshares Global go up and down completely randomly.

Pair Corralation between Gx US and Flexshares Global

Given the investment horizon of 90 days Gx US Infrastructure is expected to under-perform the Flexshares Global. In addition to that, Gx US is 1.23 times more volatile than Flexshares Global Broad. It trades about -0.42 of its total potential returns per unit of risk. Flexshares Global Broad is currently generating about -0.5 per unit of volatility. If you would invest  5,283  in Flexshares Global Broad on June 29, 2022 and sell it today you would lose (658.00)  from holding Flexshares Global Broad or give up 12.46% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Gx US Infrastructure  vs.  Flexshares Global Broad

 Performance (%) 
       Timeline  
Gx US Infrastructure 
Gx US Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Gx US Infrastructure are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gx US is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Gx US Price Channel

Flexshares Global Broad 
Flexshares Performance
0 of 100
Over the last 90 days Flexshares Global Broad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Flexshares Price Channel

Gx US and Flexshares Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gx US and Flexshares Global

The main advantage of trading using opposite Gx US and Flexshares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gx US position performs unexpectedly, Flexshares Global 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 Flexshares Global will offset losses from the drop in Flexshares Global's long position.
Gx US vs. Verizon Communications
The idea behind Gx US Infrastructure and Flexshares Global Broad 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.
Flexshares Global vs. Verizon Communications
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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

Other Complementary Tools

Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go