Correlation Between United States and ETF Securities
Can any of the company-specific risk be diversified away by investing in both United States and ETF Securities 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 United States and ETF Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Gasoline and ETF Securities, you can compare the effects of market volatilities on United States and ETF Securities 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 United States with a short position of ETF Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and ETF Securities.
Diversification Opportunities for United States and ETF Securities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and ETF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United States Gasoline and ETF Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Securities and United States 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 United States Gasoline are associated (or correlated) with ETF Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Securities has no effect on the direction of United States i.e., United States and ETF Securities go up and down completely randomly.
Pair Corralation between United States and ETF Securities
If you would invest 6,317 in United States Gasoline on January 26, 2024 and sell it today you would earn a total of 855.00 from holding United States Gasoline or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
United States Gasoline vs. ETF Securities
Performance |
| Timeline |
| United States Gasoline |
| ETF Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United States and ETF Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and ETF Securities
The main advantage of trading using opposite United States and ETF Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, ETF Securities 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 ETF Securities will offset losses from the drop in ETF Securities' long position.| United States vs. HUMANA INC | United States vs. Aquagold International | United States vs. Barloworld Ltd ADR | United States vs. Morningstar Unconstrained Allocation |
| ETF Securities vs. Vanguard Total Stock | ETF Securities vs. SPDR SP 500 | ETF Securities vs. iShares Core SP | ETF Securities vs. Vanguard Total Bond |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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