Correlation Between Nine Energy and Xtrackers Municipal
Can any of the company-specific risk be diversified away by investing in both Nine Energy and Xtrackers Municipal 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 Nine Energy and Xtrackers Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Energy Service and Xtrackers Municipal Infrastructure, you can compare the effects of market volatilities on Nine Energy and Xtrackers Municipal 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 Nine Energy with a short position of Xtrackers Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and Xtrackers Municipal.
Diversification Opportunities for Nine Energy and Xtrackers Municipal
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and Xtrackers is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and Xtrackers Municipal Infrastruc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Municipal and Nine Energy 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 Nine Energy Service are associated (or correlated) with Xtrackers Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Municipal has no effect on the direction of Nine Energy i.e., Nine Energy and Xtrackers Municipal go up and down completely randomly.
Pair Corralation between Nine Energy and Xtrackers Municipal
Given the investment horizon of 90 days Nine Energy Service is expected to under-perform the Xtrackers Municipal. In addition to that, Nine Energy is 12.29 times more volatile than Xtrackers Municipal Infrastructure. It trades about -0.04 of its total potential returns per unit of risk. Xtrackers Municipal Infrastructure is currently generating about 0.06 per unit of volatility. If you would invest 2,307 in Xtrackers Municipal Infrastructure on September 5, 2024 and sell it today you would earn a total of 298.00 from holding Xtrackers Municipal Infrastructure or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. Xtrackers Municipal Infrastruc
Performance |
| Timeline |
| Nine Energy Service |
| Xtrackers Municipal |
Nine Energy and Xtrackers Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and Xtrackers Municipal
The main advantage of trading using opposite Nine Energy and Xtrackers Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, Xtrackers Municipal 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 Xtrackers Municipal will offset losses from the drop in Xtrackers Municipal's long position.| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Newpark Resources |
| Xtrackers Municipal vs. Formidable Fortress ETF | Xtrackers Municipal vs. Sonida Senior Living | Xtrackers Municipal vs. China Yuchai International | Xtrackers Municipal vs. Nine Energy Service |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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