Correlation Between ETFS ROBO and ETFS Physical

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

By analyzing existing cross correlation between ETFS ROBO Global and ETFS Physical Silver, you can compare the effects of market volatilities on ETFS ROBO and ETFS Physical 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 ETFS ROBO with a short position of ETFS Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS ROBO and ETFS Physical.

Diversification Opportunities for ETFS ROBO and ETFS Physical

-0.46

Correlation Coefficient

ETFS ROBO  ETFS Physical

Very good diversification

The 3 months correlation between ETFS and ETFS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ETFS ROBO Global and ETFS Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Physical Silver and ETFS ROBO 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 ETFS ROBO Global are associated (or correlated) with ETFS Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Physical Silver has no effect on the direction of ETFS ROBO i.e., ETFS ROBO and ETFS Physical go up and down completely randomly.

Pair Corralation between ETFS ROBO and ETFS Physical

Assuming the 90 days trading horizon ETFS ROBO Global is expected to under-perform the ETFS Physical. In addition to that, ETFS ROBO is 1.01 times more volatile than ETFS Physical Silver. It trades about -0.09 of its total potential returns per unit of risk. ETFS Physical Silver is currently generating about 0.22 per unit of volatility. If you would invest  4,359  in ETFS Physical Silver on December 30, 2024 and sell it today you would earn a total of  688.00  from holding ETFS Physical Silver or generate 15.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

ETFS ROBO Global  vs.  ETFS Physical Silver

ETFS ROBO Global

Risk-Adjusted Performance

Very Weak

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

ETFS Physical Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ETFS Physical Silver are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, ETFS Physical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ETFS ROBO and ETFS Physical

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

The idea behind ETFS ROBO Global and ETFS Physical Silver 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.