Correlation Between Schwab Strategic and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both Schwab Strategic and Macquarie ETF 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 Schwab Strategic and Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Strategic Trust and Macquarie ETF Trust, you can compare the effects of market volatilities on Schwab Strategic and Macquarie ETF 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 Schwab Strategic with a short position of Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Strategic and Macquarie ETF.
Diversification Opportunities for Schwab Strategic and Macquarie ETF
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schwab and Macquarie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Strategic Trust and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust and Schwab Strategic 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 Schwab Strategic Trust are associated (or correlated) with Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of Schwab Strategic i.e., Schwab Strategic and Macquarie ETF go up and down completely randomly.
Pair Corralation between Schwab Strategic and Macquarie ETF
Given the investment horizon of 90 days Schwab Strategic Trust is expected to generate 5.11 times more return on investment than Macquarie ETF. However, Schwab Strategic is 5.11 times more volatile than Macquarie ETF Trust. It trades about 0.02 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about -0.05 per unit of risk. If you would invest 4,969 in Schwab Strategic Trust on November 18, 2024 and sell it today you would lose (10.00) from holding Schwab Strategic Trust or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwab Strategic Trust vs. Macquarie ETF Trust
Performance |
| Timeline |
| Schwab Strategic Trust |
| Macquarie ETF Trust |
Schwab Strategic and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Strategic and Macquarie ETF
The main advantage of trading using opposite Schwab Strategic and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Strategic position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| Schwab Strategic vs. Grayscale Bitcoin Trust | Schwab Strategic vs. ProShares Bitcoin Strategy | Schwab Strategic vs. Amplify Transformational Data | Schwab Strategic vs. Siren Nasdaq NexGen |
| Macquarie ETF vs. Global X Infrastructure | Macquarie ETF vs. iShares Global Infrastructure | Macquarie ETF vs. FlexShares STOXX Global | Macquarie ETF vs. iShares Infrastructure ETF |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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