Correlation Between Xtrackers and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Xtrackers FTSE 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 Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and Xtrackers FTSE, you can compare the effects of market volatilities on Xtrackers and Xtrackers 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 with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Xtrackers FTSE.
Diversification Opportunities for Xtrackers and Xtrackers FTSE
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Xtrackers is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and Xtrackers FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE 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 II are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE has no effect on the direction of Xtrackers i.e., Xtrackers and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between Xtrackers and Xtrackers FTSE
Assuming the 90 days trading horizon Xtrackers is expected to generate 7.39 times less return on investment than Xtrackers FTSE. In addition to that, Xtrackers is 1.01 times more volatile than Xtrackers FTSE. It trades about 0.04 of its total potential returns per unit of risk. Xtrackers FTSE is currently generating about 0.3 per unit of volatility. If you would invest 347.00 in Xtrackers FTSE on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Xtrackers FTSE or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers II vs. Xtrackers FTSE
Performance |
| Timeline |
| Xtrackers II |
| Xtrackers FTSE |
Xtrackers and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Xtrackers FTSE
The main advantage of trading using opposite Xtrackers and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Xtrackers 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| Xtrackers FTSE vs. SPDR Gold Shares | Xtrackers FTSE vs. iShares Core SP | Xtrackers FTSE vs. iShares Core MSCI |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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