Correlation Between Xtrackers and ETC Issuance
Can any of the company-specific risk be diversified away by investing in both Xtrackers and ETC Issuance 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 ETC Issuance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and ETC Issuance ETHetc, you can compare the effects of market volatilities on Xtrackers and ETC Issuance 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 ETC Issuance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and ETC Issuance.
Diversification Opportunities for Xtrackers and ETC Issuance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtrackers and ETC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and ETC Issuance ETHetc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC Issuance ETHetc 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 ETC Issuance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC Issuance ETHetc has no effect on the direction of Xtrackers i.e., Xtrackers and ETC Issuance go up and down completely randomly.
Pair Corralation between Xtrackers and ETC Issuance
Assuming the 90 days trading horizon Xtrackers II is expected to generate 12.47 times more return on investment than ETC Issuance. However, Xtrackers is 12.47 times more volatile than ETC Issuance ETHetc. It trades about 0.04 of its potential returns per unit of risk. ETC Issuance ETHetc is currently generating about 0.06 per unit of risk. If you would invest 912.00 in Xtrackers II on November 2, 2024 and sell it today you would lose (150.00) from holding Xtrackers II or give up 16.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Xtrackers II vs. ETC Issuance ETHetc
Performance |
| Timeline |
| Xtrackers II |
| ETC Issuance ETHetc |
Xtrackers and ETC Issuance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and ETC Issuance
The main advantage of trading using opposite Xtrackers and ETC Issuance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, ETC Issuance 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 ETC Issuance will offset losses from the drop in ETC Issuance's long position.| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| ETC Issuance vs. ETC Group Physical | ETC Issuance vs. ETC EUWAX Gold | ETC Issuance vs. ETC Group Global | ETC Issuance vs. ETC Issuance ETHetc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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