Correlation Between Barclays ETN and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Barclays ETN 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 Barclays ETN and Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and Barclays ETN Shiller, you can compare the effects of market volatilities on Barclays ETN and Barclays ETN 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 Barclays ETN with a short position of Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Barclays ETN.
Diversification Opportunities for Barclays ETN and Barclays ETN
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barclays and Barclays is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Barclays ETN Shiller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN Shiller and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN Shiller has no effect on the direction of Barclays ETN i.e., Barclays ETN and Barclays ETN go up and down completely randomly.
Pair Corralation between Barclays ETN and Barclays ETN
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.03 times more return on investment than Barclays ETN. However, Barclays ETN is 1.03 times more volatile than Barclays ETN Shiller. It trades about 0.13 of its potential returns per unit of risk. Barclays ETN Shiller is currently generating about 0.09 per unit of risk. If you would invest 1,714 in Barclays ETN Select on August 27, 2024 and sell it today you would earn a total of 1,284 from holding Barclays ETN Select or generate 74.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Barclays ETN Shiller
Performance |
| Timeline |
| Barclays ETN Select |
| Barclays ETN Shiller |
Barclays ETN and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Barclays ETN
The main advantage of trading using opposite Barclays ETN and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.The idea behind Barclays ETN Select and Barclays ETN Shiller 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.| Barclays ETN vs. VanEck China Bond | Barclays ETN vs. Barclays ETN Select | Barclays ETN vs. SPDR SSGA Large | Barclays ETN vs. Freedom 100 Emerging |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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