Correlation Between Barclays ETN and Capital Group
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Capital Group 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 Capital Group 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 Capital Group Fixed, you can compare the effects of market volatilities on Barclays ETN and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Capital Group.
Diversification Opportunities for Barclays ETN and Capital Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and Capital is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Capital Group Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Fixed 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Fixed has no effect on the direction of Barclays ETN i.e., Barclays ETN and Capital Group go up and down completely randomly.
Pair Corralation between Barclays ETN and Capital Group
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 2.11 times more return on investment than Capital Group. However, Barclays ETN is 2.11 times more volatile than Capital Group Fixed. It trades about 0.17 of its potential returns per unit of risk. Capital Group Fixed is currently generating about 0.08 per unit of risk. If you would invest 1,815 in Barclays ETN Select on September 1, 2024 and sell it today you would earn a total of 1,213 from holding Barclays ETN Select or generate 66.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.57% |
| Values | Daily Returns |
Barclays ETN Select vs. Capital Group Fixed
Performance |
| Timeline |
| Barclays ETN Select |
| Capital Group Fixed |
Barclays ETN and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Capital Group
The main advantage of trading using opposite Barclays ETN and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| Barclays ETN vs. First Trust North | Barclays ETN vs. Global X MLP | Barclays ETN vs. Global X MLP | Barclays ETN vs. Tortoise North American |
| Capital Group vs. Valued Advisers Trust | Capital Group vs. Columbia Diversified Fixed | Capital Group vs. Principal Exchange Traded Funds | Capital Group vs. Doubleline Etf Trust |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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