Correlation Between Xtrackers Nikkei and Vanguard FTSE
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By analyzing existing cross correlation between Xtrackers Nikkei 225 and Vanguard FTSE Developed, you can compare the effects of market volatilities on Xtrackers Nikkei and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and Vanguard FTSE.
Diversification Opportunities for Xtrackers Nikkei and Vanguard FTSE
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtrackers and Vanguard is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and Vanguard FTSE
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 1.65 times more return on investment than Vanguard FTSE. However, Xtrackers Nikkei is 1.65 times more volatile than Vanguard FTSE Developed. It trades about 0.05 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.06 per unit of risk. If you would invest 2,147 in Xtrackers Nikkei 225 on September 2, 2024 and sell it today you would earn a total of 323.00 from holding Xtrackers Nikkei 225 or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Xtrackers Nikkei 225 vs. Vanguard FTSE Developed
Performance |
| Timeline |
| Xtrackers Nikkei 225 |
| Vanguard FTSE Developed |
Xtrackers Nikkei and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Nikkei and Vanguard FTSE
The main advantage of trading using opposite Xtrackers Nikkei and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. iShares Core SP | Xtrackers Nikkei vs. iShares Core MSCI |
| Vanguard FTSE vs. Xtrackers Nikkei 225 | Vanguard FTSE vs. iShares VII PLC | Vanguard FTSE vs. NMI Holdings | Vanguard FTSE vs. SIVERS SEMICONDUCTORS AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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