Correlation Between ITETF and BANKBETF
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By analyzing existing cross correlation between ITETF and BANKBETF, you can compare the effects of market volatilities on ITETF and BANKBETF 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 ITETF with a short position of BANKBETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITETF and BANKBETF.
Diversification Opportunities for ITETF and BANKBETF
Good diversification
The 3 months correlation between ITETF and BANKBETF is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ITETF and BANKBETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKBETF and ITETF 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 ITETF are associated (or correlated) with BANKBETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKBETF has no effect on the direction of ITETF i.e., ITETF and BANKBETF go up and down completely randomly.
Pair Corralation between ITETF and BANKBETF
Assuming the 90 days trading horizon ITETF is expected to generate 1.09 times more return on investment than BANKBETF. However, ITETF is 1.09 times more volatile than BANKBETF. It trades about 0.09 of its potential returns per unit of risk. BANKBETF is currently generating about 0.06 per unit of risk. If you would invest 3,084 in ITETF on September 4, 2024 and sell it today you would earn a total of 1,362 from holding ITETF or generate 44.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.26% |
| Values | Daily Returns |
ITETF vs. BANKBETF
Performance |
| Timeline |
| ITETF |
| BANKBETF |
ITETF and BANKBETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITETF and BANKBETF
The main advantage of trading using opposite ITETF and BANKBETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITETF position performs unexpectedly, BANKBETF 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 BANKBETF will offset losses from the drop in BANKBETF's long position.The idea behind ITETF and BANKBETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BANKBETF vs. Kingfa Science Technology | BANKBETF vs. GTL Limited | BANKBETF vs. Agro Phos India | BANKBETF vs. Indo Amines Limited |
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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