Correlation Between Freedom 100 and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Freedom 100 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 Freedom 100 and Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom 100 Emerging and Barclays ETN Shiller, you can compare the effects of market volatilities on Freedom 100 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 Freedom 100 with a short position of Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom 100 and Barclays ETN.
Diversification Opportunities for Freedom 100 and Barclays ETN
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freedom and Barclays is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Freedom 100 Emerging and Barclays ETN Shiller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN Shiller and Freedom 100 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 Freedom 100 Emerging 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 Shiller has no effect on the direction of Freedom 100 i.e., Freedom 100 and Barclays ETN go up and down completely randomly.
Pair Corralation between Freedom 100 and Barclays ETN
Given the investment horizon of 90 days Freedom 100 Emerging is expected to under-perform the Barclays ETN. In addition to that, Freedom 100 is 1.41 times more volatile than Barclays ETN Shiller. It trades about -0.25 of its total potential returns per unit of risk. Barclays ETN Shiller is currently generating about 0.41 per unit of volatility. If you would invest 2,981 in Barclays ETN Shiller on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Barclays ETN Shiller or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom 100 Emerging vs. Barclays ETN Shiller
Performance |
| Timeline |
| Freedom 100 Emerging |
| Barclays ETN Shiller |
Freedom 100 and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom 100 and Barclays ETN
The main advantage of trading using opposite Freedom 100 and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom 100 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.| Freedom 100 vs. Horizon Kinetics Inflation | Freedom 100 vs. iShares MSCI Emerging | Freedom 100 vs. iShares Emerging Markets | Freedom 100 vs. WisdomTree International High |
| Barclays ETN vs. VanEck China Bond | Barclays ETN vs. Barclays ETN Select | Barclays ETN vs. SPDR SSGA Large | Barclays ETN vs. Freedom 100 Emerging |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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