Correlation Between Barclays ETN and ETF Series
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Barclays ETN and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and ETF Series.
Diversification Opportunities for Barclays ETN and ETF Series
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barclays and ETF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Barclays ETN i.e., Barclays ETN and ETF Series go up and down completely randomly.
Pair Corralation between Barclays ETN and ETF Series
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 0.93 times more return on investment than ETF Series. However, Barclays ETN Select is 1.08 times less risky than ETF Series. It trades about 0.13 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.05 per unit of risk. If you would invest 1,677 in Barclays ETN Select on September 14, 2024 and sell it today you would earn a total of 1,207 from holding Barclays ETN Select or generate 71.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 47.27% |
| Values | Daily Returns |
Barclays ETN Select vs. ETF Series Solutions
Performance |
| Timeline |
| Barclays ETN Select |
| ETF Series Solutions |
Barclays ETN and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and ETF Series
The main advantage of trading using opposite Barclays ETN and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
| ETF Series vs. SPDR Bloomberg Barclays | ETF Series vs. SPDR SSGA Fixed | ETF Series vs. SPDR DoubleLine Short | ETF Series vs. SPDR Portfolio Corporate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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