Correlation Between Xtrackers FTSE and Xtrackers Russell

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xtrackers FTSE and Xtrackers Russell 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 FTSE and Xtrackers Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers FTSE Developed and Xtrackers Russell Multifactor, you can compare the effects of market volatilities on Xtrackers FTSE and Xtrackers Russell 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 FTSE with a short position of Xtrackers Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers FTSE and Xtrackers Russell.

Diversification Opportunities for Xtrackers FTSE and Xtrackers Russell

0.07
  Correlation Coefficient

Significant 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 FTSE Developed and Xtrackers Russell Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell and Xtrackers FTSE 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 FTSE Developed are associated (or correlated) with Xtrackers Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell has no effect on the direction of Xtrackers FTSE i.e., Xtrackers FTSE and Xtrackers Russell go up and down completely randomly.

Pair Corralation between Xtrackers FTSE and Xtrackers Russell

Given the investment horizon of 90 days Xtrackers FTSE is expected to generate 1.61 times less return on investment than Xtrackers Russell. But when comparing it to its historical volatility, Xtrackers FTSE Developed is 1.0 times less risky than Xtrackers Russell. It trades about 0.04 of its potential returns per unit of risk. Xtrackers Russell Multifactor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,194  in Xtrackers Russell Multifactor on October 9, 2024 and sell it today you would earn a total of  1,202  from holding Xtrackers Russell Multifactor or generate 28.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Xtrackers FTSE Developed  vs.  Xtrackers Russell Multifactor

 Performance 
       Timeline  
Xtrackers FTSE Developed 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xtrackers FTSE Developed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Xtrackers FTSE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Xtrackers Russell 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xtrackers Russell Multifactor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Xtrackers Russell is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Xtrackers FTSE and Xtrackers Russell Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtrackers FTSE and Xtrackers Russell

The main advantage of trading using opposite Xtrackers FTSE and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers FTSE position performs unexpectedly, Xtrackers Russell 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 Russell will offset losses from the drop in Xtrackers Russell's long position.
The idea behind Xtrackers FTSE Developed and Xtrackers Russell Multifactor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Commodity Directory
Find actively traded commodities issued by global exchanges