Correlation Between Purpose Ether and Global X

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

By analyzing existing cross correlation between Purpose Ether Yield and Global X Active, you can compare the effects of market volatilities on Purpose Ether 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 Purpose Ether with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purpose Ether and Global X.

Diversification Opportunities for Purpose Ether and Global X

0.47

Correlation Coefficient

Purpose Ether  Global X

Very weak diversification

The 3 months correlation between Purpose and Global is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Purpose Ether Yield and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and Purpose Ether 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 Purpose Ether Yield 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 Active has no effect on the direction of Purpose Ether i.e., Purpose Ether and Global X go up and down completely randomly.

Pair Corralation between Purpose Ether and Global X

Assuming the 90 days trading horizon Purpose Ether Yield is expected to generate 11.79 times more return on investment than Global X. However, Purpose Ether is 11.79 times more volatile than Global X Active. It trades about 0.32 of its potential returns per unit of risk. Global X Active is currently generating about 0.07 per unit of risk. If you would invest  166.00  in Purpose Ether Yield on April 20, 2025 and sell it today you would earn a total of  180.00  from holding Purpose Ether Yield or generate 108.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Purpose Ether Yield  vs.  Global X Active

Purpose Ether Yield

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Ether Yield are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Purpose Ether displayed solid returns over the last few months and may actually be approaching a breakup point.

Global X Active

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Active are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Purpose Ether and Global X

The main advantage of trading using opposite Purpose Ether and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purpose Ether 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.

The idea behind Purpose Ether Yield and Global X Active 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.