Correlation Between ETFS Battery and ETFS Physical
Can any of the company-specific risk be diversified away by investing in both ETFS Battery and ETFS Physical 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 ETFS Battery and ETFS Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Battery Tech and ETFS Physical Silver, you can compare the effects of market volatilities on ETFS Battery and ETFS Physical 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 ETFS Battery with a short position of ETFS Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Battery and ETFS Physical.
Diversification Opportunities for ETFS Battery and ETFS Physical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and ETFS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Battery Tech and ETFS Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Physical Silver and ETFS Battery 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 ETFS Battery Tech are associated (or correlated) with ETFS Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Physical Silver has no effect on the direction of ETFS Battery i.e., ETFS Battery and ETFS Physical go up and down completely randomly.
Pair Corralation between ETFS Battery and ETFS Physical
Assuming the 90 days trading horizon ETFS Battery Tech is expected to generate 0.74 times more return on investment than ETFS Physical. However, ETFS Battery Tech is 1.34 times less risky than ETFS Physical. It trades about -0.01 of its potential returns per unit of risk. ETFS Physical Silver is currently generating about -0.3 per unit of risk. If you would invest 8,267 in ETFS Battery Tech on September 1, 2024 and sell it today you would lose (28.00) from holding ETFS Battery Tech or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ETFS Battery Tech vs. ETFS Physical Silver
Performance |
| Timeline |
| ETFS Battery Tech |
| ETFS Physical Silver |
ETFS Battery and ETFS Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Battery and ETFS Physical
The main advantage of trading using opposite ETFS Battery and ETFS Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Battery position performs unexpectedly, ETFS Physical 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 ETFS Physical will offset losses from the drop in ETFS Physical's long position.| ETFS Battery vs. ETFS Ultra Long | ETFS Battery vs. ETFS Ultra Short | ETFS Battery vs. ETFS FANG ETF | ETFS Battery vs. ETFS SP Biotech |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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