Correlation Between Barclays Capital and Discipline Fund
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and Discipline Fund 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 Barclays Capital and Discipline Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and Discipline Fund ETF, you can compare the effects of market volatilities on Barclays Capital and Discipline Fund 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 Barclays Capital with a short position of Discipline Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Discipline Fund.
Diversification Opportunities for Barclays Capital and Discipline Fund
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and Discipline is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Discipline Fund ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discipline Fund ETF and Barclays Capital 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 Barclays Capital are associated (or correlated) with Discipline Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discipline Fund ETF has no effect on the direction of Barclays Capital i.e., Barclays Capital and Discipline Fund go up and down completely randomly.
Pair Corralation between Barclays Capital and Discipline Fund
Considering the 90-day investment horizon Barclays Capital is expected to under-perform the Discipline Fund. In addition to that, Barclays Capital is 20.58 times more volatile than Discipline Fund ETF. It trades about -0.5 of its total potential returns per unit of risk. Discipline Fund ETF is currently generating about 0.06 per unit of volatility. If you would invest 2,117 in Discipline Fund ETF on September 12, 2024 and sell it today you would earn a total of 191.00 from holding Discipline Fund ETF or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.14% |
| Values | Daily Returns |
Barclays Capital vs. Discipline Fund ETF
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Discipline Fund ETF |
Barclays Capital and Discipline Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and Discipline Fund
The main advantage of trading using opposite Barclays Capital and Discipline Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, Discipline Fund 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 Discipline Fund will offset losses from the drop in Discipline Fund's long position.The idea behind Barclays Capital and Discipline Fund ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Discipline Fund vs. ATAC Rotation ETF | Discipline Fund vs. Amplify BlackSwan ISWN | Discipline Fund vs. Tidal ETF Trust | Discipline Fund vs. Aptus Defined Risk |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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