Correlation Between ETFS ROBO and ETFS Physical
Can any of the company-specific risk be diversified away by investing in both ETFS ROBO and ETFS Physical 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 ETFS ROBO and ETFS Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS ROBO Global and ETFS Physical Gold, you can compare the effects of market volatilities on ETFS ROBO and ETFS Physical 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 ETFS ROBO with a short position of ETFS Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS ROBO and ETFS Physical.
Diversification Opportunities for ETFS ROBO and ETFS Physical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and ETFS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ETFS ROBO Global and ETFS Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Physical Gold and ETFS ROBO 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 ETFS ROBO Global are associated (or correlated) with ETFS Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Physical Gold has no effect on the direction of ETFS ROBO i.e., ETFS ROBO and ETFS Physical go up and down completely randomly.
Pair Corralation between ETFS ROBO and ETFS Physical
Assuming the 90 days trading horizon ETFS ROBO Global is expected to generate 0.88 times more return on investment than ETFS Physical. However, ETFS ROBO Global is 1.14 times less risky than ETFS Physical. It trades about 0.11 of its potential returns per unit of risk. ETFS Physical Gold is currently generating about -0.12 per unit of risk. If you would invest 7,471 in ETFS ROBO Global on September 1, 2024 and sell it today you would earn a total of 210.00 from holding ETFS ROBO Global or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFS ROBO Global vs. ETFS Physical Gold
Performance |
| Timeline |
| ETFS ROBO Global |
| ETFS Physical Gold |
ETFS ROBO and ETFS Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS ROBO and ETFS Physical
The main advantage of trading using opposite ETFS ROBO and ETFS Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS ROBO position performs unexpectedly, ETFS Physical 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 ETFS Physical will offset losses from the drop in ETFS Physical's long position.| ETFS ROBO vs. ETFS Battery Tech | ETFS ROBO vs. ETFS Ultra Long | ETFS ROBO vs. ETFS Ultra Short | ETFS ROBO vs. ETFS FANG ETF |
| ETFS Physical vs. Champion Iron | ETFS Physical vs. Australian Dairy Farms | ETFS Physical vs. Perpetual Credit Income | ETFS Physical vs. Greentech Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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