Correlation Between Xtrackers Switzerland and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both Xtrackers Switzerland and SPDR 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 Switzerland and SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Switzerland UCITS and SPDR FTSE UK, you can compare the effects of market volatilities on Xtrackers Switzerland and SPDR 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 Switzerland with a short position of SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Switzerland and SPDR FTSE.
Diversification Opportunities for Xtrackers Switzerland and SPDR FTSE
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and SPDR is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Switzerland UCITS and SPDR FTSE UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE UK and Xtrackers Switzerland 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 Switzerland UCITS are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE UK has no effect on the direction of Xtrackers Switzerland i.e., Xtrackers Switzerland and SPDR FTSE go up and down completely randomly.
Pair Corralation between Xtrackers Switzerland and SPDR FTSE
Assuming the 90 days trading horizon Xtrackers Switzerland is expected to generate 2.31 times less return on investment than SPDR FTSE. But when comparing it to its historical volatility, Xtrackers Switzerland UCITS is 1.85 times less risky than SPDR FTSE. It trades about 0.03 of its potential returns per unit of risk. SPDR FTSE UK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 553.00 in SPDR FTSE UK on September 12, 2024 and sell it today you would earn a total of 62.00 from holding SPDR FTSE UK or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Xtrackers Switzerland UCITS vs. SPDR FTSE UK
Performance |
| Timeline |
| Xtrackers Switzerland |
| SPDR FTSE UK |
Xtrackers Switzerland and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Switzerland and SPDR FTSE
The main advantage of trading using opposite Xtrackers Switzerland and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Switzerland position performs unexpectedly, SPDR 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 SPDR FTSE will offset losses from the drop in SPDR FTSE's long position.| Xtrackers Switzerland vs. Baloise Holding AG | Xtrackers Switzerland vs. 21Shares Polkadot ETP | Xtrackers Switzerland vs. UBS ETF MSCI | Xtrackers Switzerland vs. BB Biotech AG |
| SPDR FTSE vs. SPDR MSCI Europe | SPDR FTSE vs. SPDR SP Utilities | SPDR FTSE vs. SPDR MSCI Europe | SPDR FTSE vs. SPDR MSCI EM |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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