Correlation Between Xtrackers Switzerland and Vanguard USD
Can any of the company-specific risk be diversified away by investing in both Xtrackers Switzerland and Vanguard USD 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 Vanguard USD 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 Vanguard USD Emerging, you can compare the effects of market volatilities on Xtrackers Switzerland and Vanguard USD 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 Vanguard USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Switzerland and Vanguard USD.
Diversification Opportunities for Xtrackers Switzerland and Vanguard USD
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Vanguard is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Switzerland UCITS and Vanguard USD Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard USD Emerging 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 Vanguard USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard USD Emerging has no effect on the direction of Xtrackers Switzerland i.e., Xtrackers Switzerland and Vanguard USD go up and down completely randomly.
Pair Corralation between Xtrackers Switzerland and Vanguard USD
Assuming the 90 days trading horizon Xtrackers Switzerland UCITS is expected to under-perform the Vanguard USD. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers Switzerland UCITS is 4.41 times less risky than Vanguard USD. The etf trades about -0.05 of its potential returns per unit of risk. The Vanguard USD Emerging is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,662 in Vanguard USD Emerging on September 4, 2024 and sell it today you would earn a total of 153.00 from holding Vanguard USD Emerging or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Switzerland UCITS vs. Vanguard USD Emerging
Performance |
| Timeline |
| Xtrackers Switzerland |
| Vanguard USD Emerging |
Xtrackers Switzerland and Vanguard USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Switzerland and Vanguard USD
The main advantage of trading using opposite Xtrackers Switzerland and Vanguard USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Switzerland position performs unexpectedly, Vanguard USD 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 Vanguard USD will offset losses from the drop in Vanguard USD's long position.| Xtrackers Switzerland vs. UBSFund Solutions MSCI | Xtrackers Switzerland vs. Vanguard SP 500 | Xtrackers Switzerland vs. iShares VII PLC | Xtrackers Switzerland vs. iShares Core SP |
| Vanguard USD vs. UBSFund Solutions MSCI | Vanguard USD vs. Vanguard SP 500 | Vanguard USD vs. iShares VII PLC | Vanguard USD vs. iShares Core SP |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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