Correlation Between Xtrackers and IQ Candriam
Can any of the company-specific risk be diversified away by investing in both Xtrackers and IQ Candriam 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 Xtrackers and IQ Candriam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP 500 and IQ Candriam ESG, you can compare the effects of market volatilities on Xtrackers and IQ Candriam 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 Xtrackers with a short position of IQ Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and IQ Candriam.
Diversification Opportunities for Xtrackers and IQ Candriam
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and IQSU is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP 500 and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG and Xtrackers 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 Xtrackers SP 500 are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of Xtrackers i.e., Xtrackers and IQ Candriam go up and down completely randomly.
Pair Corralation between Xtrackers and IQ Candriam
Given the investment horizon of 90 days Xtrackers is expected to generate 1.1 times less return on investment than IQ Candriam. But when comparing it to its historical volatility, Xtrackers SP 500 is 1.06 times less risky than IQ Candriam. It trades about 0.04 of its potential returns per unit of risk. IQ Candriam ESG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,922 in IQ Candriam ESG on October 23, 2024 and sell it today you would earn a total of 35.00 from holding IQ Candriam ESG or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP 500 vs. IQ Candriam ESG
Performance |
| Timeline |
| Xtrackers SP 500 |
| IQ Candriam ESG |
Xtrackers and IQ Candriam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and IQ Candriam
The main advantage of trading using opposite Xtrackers and IQ Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, IQ Candriam 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 IQ Candriam will offset losses from the drop in IQ Candriam's long position.| Xtrackers vs. Xtrackers MSCI USA | Xtrackers vs. iShares ESG MSCI | Xtrackers vs. SPDR SP 500 | Xtrackers vs. iShares MSCI USA |
| IQ Candriam vs. IQ Candriam ESG | IQ Candriam vs. Xtrackers MSCI USA | IQ Candriam vs. Xtrackers SP 500 | IQ Candriam vs. Nuveen ESG Large Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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