Correlation Between Xtrackers Emerging and AltShares Event
Can any of the company-specific risk be diversified away by investing in both Xtrackers Emerging and AltShares Event 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 Xtrackers Emerging and AltShares Event into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Emerging Markets and AltShares Event Driven ETF, you can compare the effects of market volatilities on Xtrackers Emerging and AltShares Event 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 Xtrackers Emerging with a short position of AltShares Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Emerging and AltShares Event.
Diversification Opportunities for Xtrackers Emerging and AltShares Event
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and AltShares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Emerging Markets and AltShares Event Driven ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Event Driven and Xtrackers Emerging 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 Xtrackers Emerging Markets are associated (or correlated) with AltShares Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Event Driven has no effect on the direction of Xtrackers Emerging i.e., Xtrackers Emerging and AltShares Event go up and down completely randomly.
Pair Corralation between Xtrackers Emerging and AltShares Event
Given the investment horizon of 90 days Xtrackers Emerging Markets is expected to under-perform the AltShares Event. In addition to that, Xtrackers Emerging is 3.9 times more volatile than AltShares Event Driven ETF. It trades about -0.16 of its total potential returns per unit of risk. AltShares Event Driven ETF is currently generating about 0.15 per unit of volatility. If you would invest 1,065 in AltShares Event Driven ETF on August 29, 2024 and sell it today you would earn a total of 10.00 from holding AltShares Event Driven ETF or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Emerging Markets vs. AltShares Event Driven ETF
Performance |
| Timeline |
| Xtrackers Emerging |
| AltShares Event Driven |
Xtrackers Emerging and AltShares Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Emerging and AltShares Event
The main advantage of trading using opposite Xtrackers Emerging and AltShares Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Emerging position performs unexpectedly, AltShares Event 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 AltShares Event will offset losses from the drop in AltShares Event's long position.| Xtrackers Emerging vs. Xtrackers MSCI Emerging | Xtrackers Emerging vs. FlexShares Morningstar Emerging | Xtrackers Emerging vs. Invesco SP Emerging | Xtrackers Emerging vs. First Trust Emerging |
| AltShares Event vs. Formidable ETF | AltShares Event vs. Xtrackers Emerging Markets | AltShares Event vs. IndexIQ Active 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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