Correlation Between Barclays ETN and OShares Europe
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and OShares Europe 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 OShares Europe 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 OShares Europe Quality, you can compare the effects of market volatilities on Barclays ETN and OShares Europe 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 OShares Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and OShares Europe.
Diversification Opportunities for Barclays ETN and OShares Europe
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and OShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and OShares Europe Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OShares Europe Quality 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 OShares Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OShares Europe Quality has no effect on the direction of Barclays ETN i.e., Barclays ETN and OShares Europe go up and down completely randomly.
Pair Corralation between Barclays ETN and OShares Europe
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.03 times more return on investment than OShares Europe. However, Barclays ETN is 1.03 times more volatile than OShares Europe Quality. It trades about 0.29 of its potential returns per unit of risk. OShares Europe Quality is currently generating about -0.15 per unit of risk. If you would invest 2,539 in Barclays ETN Select on August 28, 2024 and sell it today you would earn a total of 445.00 from holding Barclays ETN Select or generate 17.53% 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. OShares Europe Quality
Performance |
| Timeline |
| Barclays ETN Select |
| OShares Europe Quality |
Barclays ETN and OShares Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and OShares Europe
The main advantage of trading using opposite Barclays ETN and OShares Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, OShares Europe 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 OShares Europe will offset losses from the drop in OShares Europe'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 |
| OShares Europe vs. WisdomTree International Hedged | OShares Europe vs. WisdomTree Emerging Markets | OShares Europe vs. WisdomTree Dynamic Currency |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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