Correlation Between ETFS SP and ETFS Enhanced
Can any of the company-specific risk be diversified away by investing in both ETFS SP and ETFS 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 ETFS SP and ETFS Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS SP Biotech and ETFS Enhanced USD, you can compare the effects of market volatilities on ETFS SP and ETFS 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 ETFS SP with a short position of ETFS Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS SP and ETFS Enhanced.
Diversification Opportunities for ETFS SP and ETFS Enhanced
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and ETFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETFS SP Biotech and ETFS Enhanced USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Enhanced USD and ETFS SP 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 ETFS SP Biotech are associated (or correlated) with ETFS Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Enhanced USD has no effect on the direction of ETFS SP i.e., ETFS SP and ETFS Enhanced go up and down completely randomly.
Pair Corralation between ETFS SP and ETFS Enhanced
If you would invest (100.00) in ETFS Enhanced USD on November 27, 2024 and sell it today you would earn a total of 100.00 from holding ETFS Enhanced USD or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ETFS SP Biotech vs. ETFS Enhanced USD
Performance |
| Timeline |
| ETFS SP Biotech |
| ETFS Enhanced USD |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ETFS SP and ETFS Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS SP and ETFS Enhanced
The main advantage of trading using opposite ETFS SP and ETFS Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS SP position performs unexpectedly, ETFS 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 ETFS Enhanced will offset losses from the drop in ETFS Enhanced's long position.| ETFS SP vs. ETFS Battery Tech | ETFS SP vs. ETFS Ultra Long | ETFS SP vs. ETFS Ultra Short | ETFS SP vs. ETFS FANG ETF |
| ETFS Enhanced vs. ETFS Battery Tech | ETFS Enhanced vs. ETFS Ultra Long | ETFS Enhanced vs. ETFS Ultra Short | ETFS Enhanced vs. ETFS FANG ETF |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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