Correlation Between FlexShares STOXX and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both FlexShares STOXX and Macquarie ETF 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 FlexShares STOXX and Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares STOXX Global and Macquarie ETF Trust, you can compare the effects of market volatilities on FlexShares STOXX and Macquarie ETF 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 FlexShares STOXX with a short position of Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares STOXX and Macquarie ETF.
Diversification Opportunities for FlexShares STOXX and Macquarie ETF
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FlexShares and Macquarie is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares STOXX Global and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust and FlexShares STOXX 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 FlexShares STOXX Global are associated (or correlated) with Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of FlexShares STOXX i.e., FlexShares STOXX and Macquarie ETF go up and down completely randomly.
Pair Corralation between FlexShares STOXX and Macquarie ETF
Given the investment horizon of 90 days FlexShares STOXX Global is expected to generate 0.82 times more return on investment than Macquarie ETF. However, FlexShares STOXX Global is 1.22 times less risky than Macquarie ETF. It trades about 0.04 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.03 per unit of risk. If you would invest 4,995 in FlexShares STOXX Global on August 23, 2024 and sell it today you would earn a total of 760.00 from holding FlexShares STOXX Global or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
FlexShares STOXX Global vs. Macquarie ETF Trust
Performance |
| Timeline |
| FlexShares STOXX Global |
| Macquarie ETF Trust |
FlexShares STOXX and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares STOXX and Macquarie ETF
The main advantage of trading using opposite FlexShares STOXX and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares STOXX position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| FlexShares STOXX vs. iShares Infrastructure ETF | FlexShares STOXX vs. Global X Cloud | FlexShares STOXX vs. Global X Cybersecurity | FlexShares STOXX vs. Invesco Dynamic Leisure |
| Macquarie ETF vs. iShares Infrastructure ETF | Macquarie ETF vs. Global X Cloud | Macquarie ETF vs. Global X Cybersecurity | Macquarie ETF vs. Invesco Dynamic Leisure |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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