Correlation Between Energy Select and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both Energy Select and Macquarie ETF 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 Energy Select and Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Select Sector and Macquarie ETF Trust, you can compare the effects of market volatilities on Energy Select and Macquarie ETF 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 Energy Select with a short position of Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Select and Macquarie ETF.
Diversification Opportunities for Energy Select and Macquarie ETF
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Energy and Macquarie is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Energy Select Sector and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust and Energy Select 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 Energy Select Sector are associated (or correlated) with Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of Energy Select i.e., Energy Select and Macquarie ETF go up and down completely randomly.
Pair Corralation between Energy Select and Macquarie ETF
Considering the 90-day investment horizon Energy Select Sector is expected to generate 0.78 times more return on investment than Macquarie ETF. However, Energy Select Sector is 1.28 times less risky than Macquarie ETF. It trades about 0.25 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.17 per unit of risk. If you would invest 8,566 in Energy Select Sector on November 1, 2024 and sell it today you would earn a total of 404.00 from holding Energy Select Sector or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Energy Select Sector vs. Macquarie ETF Trust
Performance |
| Timeline |
| Energy Select Sector |
| Macquarie ETF Trust |
Energy Select and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Select and Macquarie ETF
The main advantage of trading using opposite Energy Select and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Select position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| Energy Select vs. Financial Select Sector | Energy Select vs. Health Care Select | Energy Select vs. Technology Select Sector | Energy Select vs. Utilities Select Sector |
| Macquarie ETF vs. Freedom Day Dividend | Macquarie ETF vs. Franklin Templeton ETF | Macquarie ETF vs. iShares MSCI China | Macquarie ETF vs. Tidal Trust II |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |