Correlation Between Xtrackers MSCI and LG Clean
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and LG Clean 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 MSCI and LG Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI China and LG Clean Water, you can compare the effects of market volatilities on Xtrackers MSCI and LG Clean 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 MSCI with a short position of LG Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and LG Clean.
Diversification Opportunities for Xtrackers MSCI and LG Clean
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and GLUG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI China and LG Clean Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Clean Water and Xtrackers MSCI 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 MSCI China are associated (or correlated) with LG Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Clean Water has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and LG Clean go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and LG Clean
Assuming the 90 days trading horizon Xtrackers MSCI China is expected to under-perform the LG Clean. In addition to that, Xtrackers MSCI is 2.44 times more volatile than LG Clean Water. It trades about -0.08 of its total potential returns per unit of risk. LG Clean Water is currently generating about 0.25 per unit of volatility. If you would invest 1,585 in LG Clean Water on October 29, 2024 and sell it today you would earn a total of 45.00 from holding LG Clean Water or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.35% |
| Values | Daily Returns |
Xtrackers MSCI China vs. LG Clean Water
Performance |
| Timeline |
| Xtrackers MSCI China |
| LG Clean Water |
Xtrackers MSCI and LG Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and LG Clean
The main advantage of trading using opposite Xtrackers MSCI and LG Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, LG Clean 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 LG Clean will offset losses from the drop in LG Clean's long position.| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares Core SP |
| LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. VanEck Solana ETN | LG Clean vs. iShares Corp Bond |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |