Correlation Between Xtrackers Nikkei and Hastings Technology
Can any of the company-specific risk be diversified away by investing in both Xtrackers Nikkei and Hastings Technology 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 Nikkei and Hastings Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Nikkei 225 and Hastings Technology Metals, you can compare the effects of market volatilities on Xtrackers Nikkei and Hastings Technology 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 Nikkei with a short position of Hastings Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and Hastings Technology.
Diversification Opportunities for Xtrackers Nikkei and Hastings Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Hastings is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and Hastings Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hastings Technology and Xtrackers Nikkei 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 Nikkei 225 are associated (or correlated) with Hastings Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hastings Technology has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and Hastings Technology go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and Hastings Technology
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 0.16 times more return on investment than Hastings Technology. However, Xtrackers Nikkei 225 is 6.45 times less risky than Hastings Technology. It trades about 0.05 of its potential returns per unit of risk. Hastings Technology Metals is currently generating about -0.04 per unit of risk. If you would invest 1,995 in Xtrackers Nikkei 225 on September 2, 2024 and sell it today you would earn a total of 475.00 from holding Xtrackers Nikkei 225 or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Xtrackers Nikkei 225 vs. Hastings Technology Metals
Performance |
| Timeline |
| Xtrackers Nikkei 225 |
| Hastings Technology |
Xtrackers Nikkei and Hastings Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Nikkei and Hastings Technology
The main advantage of trading using opposite Xtrackers Nikkei and Hastings Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, Hastings Technology 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 Hastings Technology will offset losses from the drop in Hastings Technology's long position.| Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. Vanguard Funds Public | Xtrackers Nikkei vs. iShares Core SP | Xtrackers Nikkei vs. iShares Core MSCI |
| Hastings Technology vs. BHP Group Limited | Hastings Technology vs. Rio Tinto Group | Hastings Technology vs. Vale SA | Hastings Technology vs. Vale SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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