Correlation Between Xtrackers USD and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD and Invesco BulletShares 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 Invesco BulletShares 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 Invesco BulletShares 2025, you can compare the effects of market volatilities on Xtrackers USD and Invesco BulletShares 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 Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and Invesco BulletShares.
Diversification Opportunities for Xtrackers USD and Invesco BulletShares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Invesco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD High and Invesco BulletShares 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2025 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 Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2025 has no effect on the direction of Xtrackers USD i.e., Xtrackers USD and Invesco BulletShares go up and down completely randomly.
Pair Corralation between Xtrackers USD and Invesco BulletShares
Given the investment horizon of 90 days Xtrackers USD High is expected to generate 2.44 times more return on investment than Invesco BulletShares. However, Xtrackers USD is 2.44 times more volatile than Invesco BulletShares 2025. It trades about 0.2 of its potential returns per unit of risk. Invesco BulletShares 2025 is currently generating about 0.27 per unit of risk. If you would invest 3,620 in Xtrackers USD High on August 26, 2024 and sell it today you would earn a total of 32.00 from holding Xtrackers USD High or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers USD High vs. Invesco BulletShares 2025
Performance |
| Timeline |
| Xtrackers USD High |
| Invesco BulletShares 2025 |
Xtrackers USD and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers USD and Invesco BulletShares
The main advantage of trading using opposite Xtrackers USD and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| Xtrackers USD vs. First Trust Senior | Xtrackers USD vs. First Trust Low | Xtrackers USD vs. First Trust Enhanced | Xtrackers USD vs. First Trust TCW |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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