Correlation Between Disney and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Disney and Barclays ETN 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 Disney and Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Barclays ETN Select, you can compare the effects of market volatilities on Disney and Barclays ETN 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 Disney with a short position of Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Barclays ETN.
Diversification Opportunities for Disney and Barclays ETN
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Disney and Barclays is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Barclays ETN Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN Select and Disney 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 Walt Disney are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN Select has no effect on the direction of Disney i.e., Disney and Barclays ETN go up and down completely randomly.
Pair Corralation between Disney and Barclays ETN
Considering the 90-day investment horizon Walt Disney is expected to generate 1.99 times more return on investment than Barclays ETN. However, Disney is 1.99 times more volatile than Barclays ETN Select. It trades about 0.47 of its potential returns per unit of risk. Barclays ETN Select is currently generating about 0.61 per unit of risk. If you would invest 9,620 in Walt Disney on August 27, 2024 and sell it today you would earn a total of 1,945 from holding Walt Disney or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Barclays ETN Select
Performance |
| Timeline |
| Walt Disney |
| Barclays ETN Select |
Disney and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Barclays ETN
The main advantage of trading using opposite Disney and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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