Correlation Between Barclays ETN and Henderson European
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Henderson European 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 Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Shiller and Henderson European Focus, you can compare the effects of market volatilities on Barclays ETN and Henderson European 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 Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Henderson European.
Diversification Opportunities for Barclays ETN and Henderson European
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and Henderson is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Shiller and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus 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 Shiller are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Barclays ETN i.e., Barclays ETN and Henderson European go up and down completely randomly.
Pair Corralation between Barclays ETN and Henderson European
Given the investment horizon of 90 days Barclays ETN Shiller is expected to generate 0.74 times more return on investment than Henderson European. However, Barclays ETN Shiller is 1.35 times less risky than Henderson European. It trades about 0.56 of its potential returns per unit of risk. Henderson European Focus is currently generating about -0.06 per unit of risk. If you would invest 2,953 in Barclays ETN Shiller on September 1, 2024 and sell it today you would earn a total of 252.00 from holding Barclays ETN Shiller or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barclays ETN Shiller vs. Henderson European Focus
Performance |
| Timeline |
| Barclays ETN Shiller |
| Henderson European Focus |
Barclays ETN and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Henderson European
The main advantage of trading using opposite Barclays ETN and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Barclays ETN vs. VanEck China Bond | Barclays ETN vs. Barclays ETN Select | Barclays ETN vs. SPDR SSGA Large | Barclays ETN vs. Freedom 100 Emerging |
| Henderson European vs. Invesco European Small | Henderson European vs. Henderson European Focus | Henderson European vs. Invesco European Growth | Henderson European vs. Jpmorgan Intrepid European |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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