Correlation Between Xtrackers Low and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Xtrackers Low and NYSE Composite 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 Low and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Low Beta and NYSE Composite, you can compare the effects of market volatilities on Xtrackers Low and NYSE Composite 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 Low with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Low and NYSE Composite.
Diversification Opportunities for Xtrackers Low and NYSE Composite
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and NYSE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Low Beta and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Xtrackers Low 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 Low Beta are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Xtrackers Low i.e., Xtrackers Low and NYSE Composite go up and down completely randomly.
Pair Corralation between Xtrackers Low and NYSE Composite
Given the investment horizon of 90 days Xtrackers Low Beta is expected to generate 0.34 times more return on investment than NYSE Composite. However, Xtrackers Low Beta is 2.95 times less risky than NYSE Composite. It trades about 0.15 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.15 per unit of risk. If you would invest 4,579 in Xtrackers Low Beta on March 21, 2024 and sell it today you would earn a total of 32.80 from holding Xtrackers Low Beta or generate 0.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Xtrackers Low Beta vs. NYSE Composite
Performance |
Timeline |
Xtrackers Low and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Xtrackers Low Beta
Pair trading matchups for Xtrackers Low
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Xtrackers Low and NYSE Composite
The main advantage of trading using opposite Xtrackers Low and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Low position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Xtrackers Low vs. Ep Emerging Markets | Xtrackers Low vs. Coca Cola Consolidated | Xtrackers Low vs. Americold Realty Trust | Xtrackers Low vs. SEI Investments |
NYSE Composite vs. SEI Investments | NYSE Composite vs. Millennium Investment Acquisition | NYSE Composite vs. Sun Life Financial | NYSE Composite vs. PennantPark Investment |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Transaction History View history of all your transactions and understand their impact on performance | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |