Correlation Between Global X and Purpose Core

Can any of the company-specific risk be diversified away by investing in both Global X and Purpose Core 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 Purpose Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X Artificial and Purpose Core Dividend, you can compare the effects of market volatilities on Global X and Purpose Core 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 Purpose Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Purpose Core.

Diversification Opportunities for Global X and Purpose Core

0.96

Correlation Coefficient

Global X  Purpose Core

Almost no diversification

The 3 months correlation between Global and Purpose is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Global X Artificial and Purpose Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Core Dividend 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 Artificial are associated (or correlated) with Purpose Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Core Dividend has no effect on the direction of Global X i.e., Global X and Purpose Core go up and down completely randomly.

Pair Corralation between Global X and Purpose Core

Assuming the 90 days trading horizon Global X Artificial is expected to generate 4.58 times more return on investment than Purpose Core. However, Global X is 4.58 times more volatile than Purpose Core Dividend. It trades about 0.39 of its potential returns per unit of risk. Purpose Core Dividend is currently generating about 0.31 per unit of risk. If you would invest  3,182  in Global X Artificial on April 23, 2025 and sell it today you would earn a total of  1,406  from holding Global X Artificial or generate 44.19% 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 Artificial  vs.  Purpose Core Dividend

Global X Artificial

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Artificial are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global X displayed solid returns over the last few months and may actually be approaching a breakup point.

Purpose Core Dividend

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Core Dividend are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Purpose Core may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Global X and Purpose Core

The main advantage of trading using opposite Global X and Purpose Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Purpose Core 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 Purpose Core will offset losses from the drop in Purpose Core's long position.

The idea behind Global X Artificial and Purpose Core Dividend 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..