Correlation Between Barclays ETN and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI Europe, you can compare the effects of market volatilities on Barclays ETN and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Xtrackers MSCI.
Diversification Opportunities for Barclays ETN and Xtrackers MSCI
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barclays and Xtrackers is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Xtrackers MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Europe 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Europe has no effect on the direction of Barclays ETN i.e., Barclays ETN and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Barclays ETN and Xtrackers MSCI
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.29 times more return on investment than Xtrackers MSCI. However, Barclays ETN is 1.29 times more volatile than Xtrackers MSCI Europe. It trades about 0.13 of its potential returns per unit of risk. Xtrackers MSCI Europe is currently generating about 0.07 per unit of risk. If you would invest 1,678 in Barclays ETN Select on August 29, 2024 and sell it today you would earn a total of 1,306 from holding Barclays ETN Select or generate 77.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Xtrackers MSCI Europe
Performance |
| Timeline |
| Barclays ETN Select |
| Xtrackers MSCI Europe |
Barclays ETN and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Xtrackers MSCI
The main advantage of trading using opposite Barclays ETN and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| Xtrackers MSCI vs. Xtrackers MSCI Japan | Xtrackers MSCI vs. iShares Currency Hedged | Xtrackers MSCI vs. Xtrackers MSCI EAFE | Xtrackers MSCI vs. WisdomTree Europe Hedged |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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