Correlation Between NYSE Composite and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Xtrackers FTSE 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 NYSE Composite and Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Xtrackers FTSE Developed, you can compare the effects of market volatilities on NYSE Composite and Xtrackers FTSE 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 NYSE Composite with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Xtrackers FTSE.
Diversification Opportunities for NYSE Composite and Xtrackers FTSE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Xtrackers is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed and NYSE Composite 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 NYSE Composite are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of NYSE Composite i.e., NYSE Composite and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between NYSE Composite and Xtrackers FTSE
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.78 times more return on investment than Xtrackers FTSE. However, NYSE Composite is 1.28 times less risky than Xtrackers FTSE. It trades about 0.38 of its potential returns per unit of risk. Xtrackers FTSE Developed is currently generating about 0.08 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 96,983 from holding NYSE Composite or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Xtrackers FTSE Developed
Performance |
| Timeline |
NYSE Composite and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Xtrackers FTSE Developed
Pair trading matchups for Xtrackers FTSE
Pair Trading with NYSE Composite and Xtrackers FTSE
The main advantage of trading using opposite NYSE Composite and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Xtrackers FTSE 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 FTSE will offset losses from the drop in Xtrackers FTSE's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Xtrackers FTSE vs. Xtrackers Russell Multifactor | Xtrackers FTSE vs. Xtrackers MSCI All | Xtrackers FTSE vs. WisdomTree Dynamic Currency | Xtrackers FTSE vs. Xtrackers MSCI Eurozone |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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