Correlation Between Xtrackers Nikkei and Vanguard Funds
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By analyzing existing cross correlation between Xtrackers Nikkei 225 and Vanguard Funds PLC, you can compare the effects of market volatilities on Xtrackers Nikkei and Vanguard Funds 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 Nikkei with a short position of Vanguard Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and Vanguard Funds.
Diversification Opportunities for Xtrackers Nikkei and Vanguard Funds
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Vanguard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and Vanguard Funds PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Funds PLC and Xtrackers Nikkei 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 Nikkei 225 are associated (or correlated) with Vanguard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Funds PLC has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and Vanguard Funds go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and Vanguard Funds
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 2.96 times more return on investment than Vanguard Funds. However, Xtrackers Nikkei is 2.96 times more volatile than Vanguard Funds PLC. It trades about 0.15 of its potential returns per unit of risk. Vanguard Funds PLC is currently generating about 0.19 per unit of risk. If you would invest 2,300 in Xtrackers Nikkei 225 on September 6, 2024 and sell it today you would earn a total of 272.00 from holding Xtrackers Nikkei 225 or generate 11.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers Nikkei 225 vs. Vanguard Funds PLC
Performance |
Timeline |
Xtrackers Nikkei 225 |
Vanguard Funds PLC |
Xtrackers Nikkei and Vanguard Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers Nikkei and Vanguard Funds
The main advantage of trading using opposite Xtrackers Nikkei and Vanguard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, Vanguard Funds 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 Vanguard Funds will offset losses from the drop in Vanguard Funds' long position.Xtrackers Nikkei vs. Xtrackers II Global | Xtrackers Nikkei vs. Xtrackers FTSE | Xtrackers Nikkei vs. Xtrackers SP 500 | Xtrackers Nikkei vs. Xtrackers MSCI |
Vanguard Funds vs. Vanguard ESG Developed | Vanguard Funds vs. Vanguard Funds Public | Vanguard Funds vs. Vanguard Funds PLC | Vanguard Funds vs. Vanguard Funds Public |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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