Correlation Between Exchange Traded and IXSE
Can any of the company-specific risk be diversified away by investing in both Exchange Traded and IXSE 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 Exchange Traded and IXSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Traded Concepts and IXSE, you can compare the effects of market volatilities on Exchange Traded and IXSE 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 Exchange Traded with a short position of IXSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and IXSE.
Diversification Opportunities for Exchange Traded and IXSE
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exchange and IXSE is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and IXSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXSE and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with IXSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXSE has no effect on the direction of Exchange Traded i.e., Exchange Traded and IXSE go up and down completely randomly.
Pair Corralation between Exchange Traded and IXSE
Given the investment horizon of 90 days Exchange Traded Concepts is expected to generate 1.45 times more return on investment than IXSE. However, Exchange Traded is 1.45 times more volatile than IXSE. It trades about 0.06 of its potential returns per unit of risk. IXSE is currently generating about 0.04 per unit of risk. If you would invest 2,969 in Exchange Traded Concepts on August 30, 2024 and sell it today you would earn a total of 919.00 from holding Exchange Traded Concepts or generate 30.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.25% |
| Values | Daily Returns |
Exchange Traded Concepts vs. IXSE
Performance |
| Timeline |
| Exchange Traded Concepts |
| IXSE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exchange Traded and IXSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Traded and IXSE
The main advantage of trading using opposite Exchange Traded and IXSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, IXSE 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 IXSE will offset losses from the drop in IXSE's long position.| Exchange Traded vs. VanEck India Growth | Exchange Traded vs. Franklin FTSE India | Exchange Traded vs. Columbia India Consumer | Exchange Traded vs. First Trust India |
| IXSE vs. iShares India 50 | IXSE vs. iShares MSCI China | IXSE vs. VanEck Vietnam ETF | IXSE vs. iShares MSCI India |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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