Correlation Between Xtrackers High and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Xtrackers High and IShares Trust 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 High and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers High Beta and iShares Trust , you can compare the effects of market volatilities on Xtrackers High and IShares Trust 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 High with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers High and IShares Trust.
Diversification Opportunities for Xtrackers High and IShares Trust
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and IShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers High Beta and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Xtrackers High 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 High Beta are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Xtrackers High i.e., Xtrackers High and IShares Trust go up and down completely randomly.
Pair Corralation between Xtrackers High and IShares Trust
Given the investment horizon of 90 days Xtrackers High Beta is expected to generate 1.03 times more return on investment than IShares Trust. However, Xtrackers High is 1.03 times more volatile than iShares Trust . It trades about 0.15 of its potential returns per unit of risk. iShares Trust is currently generating about 0.1 per unit of risk. If you would invest 4,200 in Xtrackers High Beta on September 4, 2024 and sell it today you would earn a total of 34.00 from holding Xtrackers High Beta or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers High Beta vs. iShares Trust
Performance |
| Timeline |
| Xtrackers High Beta |
| iShares Trust |
Xtrackers High and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers High and IShares Trust
The main advantage of trading using opposite Xtrackers High and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers High position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Xtrackers High vs. Xtrackers Short Duration | Xtrackers High vs. FlexShares High Yield | Xtrackers High vs. Xtrackers Low Beta | Xtrackers High vs. iShares Edge High |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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