Correlation Between ETFS Physical and ETFS Battery
Can any of the company-specific risk be diversified away by investing in both ETFS Physical and ETFS Battery 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 Physical and ETFS Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Physical Silver and ETFS Battery Tech, you can compare the effects of market volatilities on ETFS Physical and ETFS Battery 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 Physical with a short position of ETFS Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Physical and ETFS Battery.
Diversification Opportunities for ETFS Physical and ETFS Battery
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and ETFS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Physical Silver and ETFS Battery Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Battery Tech and ETFS Physical 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 Physical Silver are associated (or correlated) with ETFS Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Battery Tech has no effect on the direction of ETFS Physical i.e., ETFS Physical and ETFS Battery go up and down completely randomly.
Pair Corralation between ETFS Physical and ETFS Battery
Assuming the 90 days trading horizon ETFS Physical Silver is expected to under-perform the ETFS Battery. In addition to that, ETFS Physical is 1.4 times more volatile than ETFS Battery Tech. It trades about -0.17 of its total potential returns per unit of risk. ETFS Battery Tech is currently generating about -0.05 per unit of volatility. If you would invest 8,359 in ETFS Battery Tech on August 29, 2024 and sell it today you would lose (133.00) from holding ETFS Battery Tech or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ETFS Physical Silver vs. ETFS Battery Tech
Performance |
| Timeline |
| ETFS Physical Silver |
| ETFS Battery Tech |
ETFS Physical and ETFS Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Physical and ETFS Battery
The main advantage of trading using opposite ETFS Physical and ETFS Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Physical position performs unexpectedly, ETFS Battery 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 Battery will offset losses from the drop in ETFS Battery's long position.| ETFS Physical vs. BetaShares Geared Australian | ETFS Physical vs. BetaShares Global Robotics | ETFS Physical vs. iShares China LargeCap | ETFS Physical vs. Russell Australian Government |
| ETFS Battery vs. BetaShares Global Government | ETFS Battery vs. BetaShares Geared Australian | ETFS Battery vs. Global X Semiconductor | ETFS Battery vs. iShares UBS Government |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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