Correlation Between Xtrackers and IShares FTSE
Can any of the company-specific risk be diversified away by investing in both Xtrackers and IShares 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 IShares 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 iShares FTSE MIB, you can compare the effects of market volatilities on Xtrackers and IShares 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 IShares FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and IShares FTSE.
Diversification Opportunities for Xtrackers and IShares FTSE
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and IShares is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and iShares FTSE MIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares FTSE MIB 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 IShares FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares FTSE MIB has no effect on the direction of Xtrackers i.e., Xtrackers and IShares FTSE go up and down completely randomly.
Pair Corralation between Xtrackers and IShares FTSE
Assuming the 90 days trading horizon Xtrackers II is expected to generate 0.58 times more return on investment than IShares FTSE. However, Xtrackers II is 1.72 times less risky than IShares FTSE. It trades about 0.04 of its potential returns per unit of risk. iShares FTSE MIB is currently generating about -0.21 per unit of risk. If you would invest 748.00 in Xtrackers II on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Xtrackers II or generate 0.4% 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. iShares FTSE MIB
Performance |
| Timeline |
| Xtrackers II |
| iShares FTSE MIB |
Xtrackers and IShares FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and IShares FTSE
The main advantage of trading using opposite Xtrackers and IShares FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, IShares 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 IShares FTSE will offset losses from the drop in IShares FTSE's long position.| Xtrackers vs. iShares VII PLC | Xtrackers vs. SPDR Gold Shares | Xtrackers vs. iShares Core SP | Xtrackers vs. iShares Core MSCI |
| IShares FTSE vs. iShares Govt Bond | IShares FTSE vs. iShares Global AAA AA | IShares FTSE vs. iShares Smart City | IShares FTSE vs. iShares Broad High |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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