Correlation Between Xtrackers Low and IShares 0

Can any of the company-specific risk be diversified away by investing in both Xtrackers Low and IShares 0 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 IShares 0 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 iShares 0 5 Year, you can compare the effects of market volatilities on Xtrackers Low and IShares 0 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 IShares 0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Low and IShares 0.

Diversification Opportunities for Xtrackers Low and IShares 0

0.65

Correlation Coefficient

Xtrackers Low  IShares 0

Poor diversification

The 3 months correlation between Xtrackers and IShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Low Beta and iShares 0 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 0 5 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 IShares 0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 0 5 has no effect on the direction of Xtrackers Low i.e., Xtrackers Low and IShares 0 go up and down completely randomly.

Pair Corralation between Xtrackers Low and IShares 0

Given the investment horizon of 90 days Xtrackers Low Beta is expected to under-perform the IShares 0. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers Low Beta is 1.09 times less risky than IShares 0. The etf trades about -0.08 of its potential returns per unit of risk. The iShares 0 5 Year is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,270  in iShares 0 5 Year on October 14, 2024 and sell it today you would lose (8.00) from holding iShares 0 5 Year or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Xtrackers Low Beta  vs.  iShares 0 5 Year

Xtrackers Low Beta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers Low Beta has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Xtrackers Low is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iShares 0 5

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares 0 5 Year are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IShares 0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xtrackers Low and IShares 0

The main advantage of trading using opposite Xtrackers Low and IShares 0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Low position performs unexpectedly, IShares 0 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 IShares 0 will offset losses from the drop in IShares 0's long position.

The idea behind Xtrackers Low Beta and iShares 0 5 Year 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.