Correlation Between Barclays ETN and NuShares Enhanced
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and NuShares Enhanced 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 NuShares Enhanced 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 NuShares Enhanced Yield, you can compare the effects of market volatilities on Barclays ETN and NuShares Enhanced 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 NuShares Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and NuShares Enhanced.
Diversification Opportunities for Barclays ETN and NuShares Enhanced
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and NuShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and NuShares Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuShares Enhanced Yield 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 NuShares Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuShares Enhanced Yield has no effect on the direction of Barclays ETN i.e., Barclays ETN and NuShares Enhanced go up and down completely randomly.
Pair Corralation between Barclays ETN and NuShares Enhanced
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 2.98 times more return on investment than NuShares Enhanced. However, Barclays ETN is 2.98 times more volatile than NuShares Enhanced Yield. It trades about 0.51 of its potential returns per unit of risk. NuShares Enhanced Yield is currently generating about 0.06 per unit of risk. If you would invest 2,654 in Barclays ETN Select on August 29, 2024 and sell it today you would earn a total of 330.00 from holding Barclays ETN Select or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. NuShares Enhanced Yield
Performance |
| Timeline |
| Barclays ETN Select |
| NuShares Enhanced Yield |
Barclays ETN and NuShares Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and NuShares Enhanced
The main advantage of trading using opposite Barclays ETN and NuShares Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, NuShares Enhanced 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 NuShares Enhanced will offset losses from the drop in NuShares Enhanced'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 |
| NuShares Enhanced vs. Nuveen Enhanced Yield | NuShares Enhanced vs. Nuveen ESG Aggregate | NuShares Enhanced vs. Virtus Newfleet Multi Sector | NuShares Enhanced vs. iShares iBonds Dec |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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