Correlation Between Xtrackers and Source KBW
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By analyzing existing cross correlation between Xtrackers II and Source KBW NASDAQ, you can compare the effects of market volatilities on Xtrackers and Source KBW 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 Source KBW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Source KBW.
Diversification Opportunities for Xtrackers and Source KBW
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Source is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and Source KBW NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source KBW NASDAQ 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 Source KBW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source KBW NASDAQ has no effect on the direction of Xtrackers i.e., Xtrackers and Source KBW go up and down completely randomly.
Pair Corralation between Xtrackers and Source KBW
Assuming the 90 days trading horizon Xtrackers is expected to generate 1.81 times less return on investment than Source KBW. In addition to that, Xtrackers is 1.03 times more volatile than Source KBW NASDAQ. It trades about 0.09 of its total potential returns per unit of risk. Source KBW NASDAQ is currently generating about 0.17 per unit of volatility. If you would invest 5,572 in Source KBW NASDAQ on September 12, 2024 and sell it today you would earn a total of 221.00 from holding Source KBW NASDAQ or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers II vs. Source KBW NASDAQ
Performance |
| Timeline |
| Xtrackers II |
| Source KBW NASDAQ |
Xtrackers and Source KBW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Source KBW
The main advantage of trading using opposite Xtrackers and Source KBW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Source KBW 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 Source KBW will offset losses from the drop in Source KBW's long position.| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| Source KBW vs. UBS Fund Solutions | Source KBW vs. Xtrackers II | Source KBW vs. Xtrackers Nikkei 225 | Source KBW vs. iShares VII PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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