Correlation Between DSJA and NuShares ETF

Can any of the company-specific risk be diversified away by investing in both DSJA and NuShares ETF 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 DSJA and NuShares ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DSJA and NuShares ETF Trust, you can compare the effects of market volatilities on DSJA and NuShares ETF 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 DSJA with a short position of NuShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and NuShares ETF.

Diversification Opportunities for DSJA and NuShares ETF

0.0

Correlation Coefficient

DSJA  NuShares ETF

Pay attention - limited upside

The 3 months correlation between DSJA and NuShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and NuShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuShares ETF Trust and DSJA 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 DSJA are associated (or correlated) with NuShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuShares ETF Trust has no effect on the direction of DSJA i.e., DSJA and NuShares ETF go up and down completely randomly.

Pair Corralation between DSJA and NuShares ETF

Given the investment horizon of 90 days DSJA is expected to generate 0.49 times more return on investment than NuShares ETF. However, DSJA is 2.02 times less risky than NuShares ETF. It trades about 0.15 of its potential returns per unit of risk. NuShares ETF Trust is currently generating about 0.03 per unit of risk. If you would invest  2,592  in DSJA on October 27, 2024 and sell it today you would earn a total of  273.00  from holding DSJA or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.68%
Values	Daily Returns

DSJA  vs.  NuShares ETF Trust

DSJA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NuShares ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuShares ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, NuShares ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DSJA and NuShares ETF

The main advantage of trading using opposite DSJA and NuShares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, NuShares ETF 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 NuShares ETF will offset losses from the drop in NuShares ETF's long position.

The idea behind DSJA and NuShares ETF Trust 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.