Correlation Between Barclays ETN and Freedom 100
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Freedom 100 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 Freedom 100 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 Freedom 100 Emerging, you can compare the effects of market volatilities on Barclays ETN and Freedom 100 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 Freedom 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Freedom 100.
Diversification Opportunities for Barclays ETN and Freedom 100
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and Freedom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Freedom 100 Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom 100 Emerging 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 Freedom 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom 100 Emerging has no effect on the direction of Barclays ETN i.e., Barclays ETN and Freedom 100 go up and down completely randomly.
Pair Corralation between Barclays ETN and Freedom 100
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 0.76 times more return on investment than Freedom 100. However, Barclays ETN Select is 1.32 times less risky than Freedom 100. It trades about 0.18 of its potential returns per unit of risk. Freedom 100 Emerging is currently generating about 0.04 per unit of risk. If you would invest 1,694 in Barclays ETN Select on September 2, 2024 and sell it today you would earn a total of 1,334 from holding Barclays ETN Select or generate 78.75% 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. Freedom 100 Emerging
Performance |
| Timeline |
| Barclays ETN Select |
| Freedom 100 Emerging |
Barclays ETN and Freedom 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Freedom 100
The main advantage of trading using opposite Barclays ETN and Freedom 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Freedom 100 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 Freedom 100 will offset losses from the drop in Freedom 100'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 |
| Freedom 100 vs. Horizon Kinetics Inflation | Freedom 100 vs. iShares MSCI Emerging | Freedom 100 vs. iShares Emerging Markets | Freedom 100 vs. WisdomTree International High |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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