Correlation Between Xtrackers USD and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD and BNY Mellon 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 USD and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers USD High and BNY Mellon High, you can compare the effects of market volatilities on Xtrackers USD and BNY Mellon 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 USD with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and BNY Mellon.
Diversification Opportunities for Xtrackers USD and BNY Mellon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and BNY is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD High and BNY Mellon High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon High and Xtrackers USD 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 USD High are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon High has no effect on the direction of Xtrackers USD i.e., Xtrackers USD and BNY Mellon go up and down completely randomly.
Pair Corralation between Xtrackers USD and BNY Mellon
Given the investment horizon of 90 days Xtrackers USD is expected to generate 1.08 times less return on investment than BNY Mellon. In addition to that, Xtrackers USD is 1.18 times more volatile than BNY Mellon High. It trades about 0.2 of its total potential returns per unit of risk. BNY Mellon High is currently generating about 0.26 per unit of volatility. If you would invest 4,778 in BNY Mellon High on November 3, 2024 and sell it today you would earn a total of 60.00 from holding BNY Mellon High or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers USD High vs. BNY Mellon High
Performance |
| Timeline |
| Xtrackers USD High |
| BNY Mellon High |
Xtrackers USD and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers USD and BNY Mellon
The main advantage of trading using opposite Xtrackers USD and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Xtrackers USD vs. SPDR Bloomberg Emerging | Xtrackers USD vs. iShares Broad USD | Xtrackers USD vs. SPDR Barclays Intermediate | Xtrackers USD vs. Schwab Intermediate Term Treasury |
| BNY Mellon vs. BNY Mellon International | BNY Mellon vs. BNY Mellon ETF | BNY Mellon vs. BNY Mellon Mid | BNY Mellon vs. BNY Mellon Large |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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