Correlation Between NuShares ETF and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both NuShares ETF and Xtrackers MSCI 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 NuShares ETF and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuShares ETF Trust and Xtrackers MSCI USA, you can compare the effects of market volatilities on NuShares ETF and Xtrackers MSCI 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 NuShares ETF with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuShares ETF and Xtrackers MSCI.
Diversification Opportunities for NuShares ETF and Xtrackers MSCI
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NuShares and Xtrackers is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NuShares ETF Trust and Xtrackers MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI USA and NuShares ETF 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 NuShares ETF Trust are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI USA has no effect on the direction of NuShares ETF i.e., NuShares ETF and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between NuShares ETF and Xtrackers MSCI
Given the investment horizon of 90 days NuShares ETF is expected to generate 13.32 times less return on investment than Xtrackers MSCI. In addition to that, NuShares ETF is 1.09 times more volatile than Xtrackers MSCI USA. It trades about 0.02 of its total potential returns per unit of risk. Xtrackers MSCI USA is currently generating about 0.32 per unit of volatility. If you would invest 5,297 in Xtrackers MSCI USA on September 5, 2024 and sell it today you would earn a total of 304.00 from holding Xtrackers MSCI USA or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NuShares ETF Trust vs. Xtrackers MSCI USA
Performance |
| Timeline |
| NuShares ETF Trust |
| Xtrackers MSCI USA |
NuShares ETF and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuShares ETF and Xtrackers MSCI
The main advantage of trading using opposite NuShares ETF and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuShares ETF position performs unexpectedly, Xtrackers MSCI 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 MSCI will offset losses from the drop in Xtrackers MSCI's long position.| NuShares ETF vs. iShares Core SP | NuShares ETF vs. iShares Core 1 5 | NuShares ETF vs. iShares Core MSCI | NuShares ETF vs. iShares Core SP |
| Xtrackers MSCI vs. Vanguard Total Stock | Xtrackers MSCI vs. SPDR SP 500 | Xtrackers MSCI vs. iShares Core SP | Xtrackers MSCI vs. Vanguard Dividend Appreciation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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