Correlation Between Xtrackers MSCI and Xtrackers Stoxx
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Xtrackers Stoxx 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 MSCI and Xtrackers Stoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI and Xtrackers Stoxx, you can compare the effects of market volatilities on Xtrackers MSCI and Xtrackers Stoxx 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 MSCI with a short position of Xtrackers Stoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Xtrackers Stoxx.
Diversification Opportunities for Xtrackers MSCI and Xtrackers Stoxx
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Xtrackers is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI and Xtrackers Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Stoxx and Xtrackers MSCI 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 MSCI are associated (or correlated) with Xtrackers Stoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Stoxx has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Xtrackers Stoxx go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Xtrackers Stoxx
Assuming the 90 days trading horizon Xtrackers MSCI is expected to generate 0.79 times more return on investment than Xtrackers Stoxx. However, Xtrackers MSCI is 1.27 times less risky than Xtrackers Stoxx. It trades about 0.02 of its potential returns per unit of risk. Xtrackers Stoxx is currently generating about -0.27 per unit of risk. If you would invest 688.00 in Xtrackers MSCI on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Xtrackers MSCI or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI vs. Xtrackers Stoxx
Performance |
| Timeline |
| Xtrackers MSCI |
| Xtrackers Stoxx |
Xtrackers MSCI and Xtrackers Stoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Xtrackers Stoxx
The main advantage of trading using opposite Xtrackers MSCI and Xtrackers Stoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Xtrackers Stoxx 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 Stoxx will offset losses from the drop in Xtrackers Stoxx's long position.| Xtrackers MSCI vs. Xtrackers II Global | Xtrackers MSCI vs. Xtrackers FTSE | Xtrackers MSCI vs. Xtrackers SP 500 | Xtrackers MSCI vs. Xtrackers Stoxx |
| Xtrackers Stoxx vs. Xtrackers II Global | Xtrackers Stoxx vs. Xtrackers FTSE | Xtrackers Stoxx vs. Xtrackers SP 500 | Xtrackers Stoxx vs. Xtrackers 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |