Correlation Between Barclays ETN and ALPS International
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and ALPS International 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 ALPS International 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 ALPS International Sector, you can compare the effects of market volatilities on Barclays ETN and ALPS International 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 ALPS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and ALPS International.
Diversification Opportunities for Barclays ETN and ALPS International
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and ALPS is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and ALPS International Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPS International Sector 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 ALPS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPS International Sector has no effect on the direction of Barclays ETN i.e., Barclays ETN and ALPS International go up and down completely randomly.
Pair Corralation between Barclays ETN and ALPS International
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.06 times more return on investment than ALPS International. However, Barclays ETN is 1.06 times more volatile than ALPS International Sector. It trades about 0.14 of its potential returns per unit of risk. ALPS International Sector is currently generating about 0.06 per unit of risk. If you would invest 1,658 in Barclays ETN Select on August 30, 2024 and sell it today you would earn a total of 1,351 from holding Barclays ETN Select or generate 81.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. ALPS International Sector
Performance |
| Timeline |
| Barclays ETN Select |
| ALPS International Sector |
Barclays ETN and ALPS International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and ALPS International
The main advantage of trading using opposite Barclays ETN and ALPS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, ALPS International 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 ALPS International will offset losses from the drop in ALPS International'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 |
| ALPS International vs. Vanguard International Dividend | ALPS International vs. Vanguard Global ex US | ALPS International vs. Vanguard High Dividend | ALPS International vs. Vanguard Emerging Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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