Correlation Between PowerShares and PowerShares
Can any of the company-specific risk be diversified away by investing in both PowerShares and PowerShares 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 PowerShares and PowerShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PowerShares and PowerShares DB Crude, you can compare the effects of market volatilities on PowerShares and PowerShares 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 PowerShares with a short position of PowerShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerShares and PowerShares.
Diversification Opportunities for PowerShares and PowerShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PowerShares and PowerShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PowerShares and PowerShares DB Crude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerShares DB Crude and PowerShares 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 PowerShares are associated (or correlated) with PowerShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerShares DB Crude has no effect on the direction of PowerShares i.e., PowerShares and PowerShares go up and down completely randomly.
Pair Corralation between PowerShares and PowerShares
If you would invest (100.00) in PowerShares DB Crude on September 4, 2024 and sell it today you would earn a total of 100.00 from holding PowerShares DB Crude or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PowerShares vs. PowerShares DB Crude
Performance |
| Timeline |
| PowerShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PowerShares DB Crude |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PowerShares and PowerShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerShares and PowerShares
The main advantage of trading using opposite PowerShares and PowerShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerShares position performs unexpectedly, PowerShares 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 PowerShares will offset losses from the drop in PowerShares' long position.| PowerShares vs. Vanguard Total Stock | PowerShares vs. SPDR SP 500 | PowerShares vs. Vanguard Total Bond | PowerShares vs. Vanguard Value Index |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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