Correlation Between Xtrackers and WisdomTree STOXX
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By analyzing existing cross correlation between Xtrackers SP and WisdomTree STOXX Europe, you can compare the effects of market volatilities on Xtrackers and WisdomTree STOXX 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 with a short position of WisdomTree STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and WisdomTree STOXX.
Diversification Opportunities for Xtrackers and WisdomTree STOXX
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and WisdomTree is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP and WisdomTree STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree STOXX Europe and Xtrackers 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 SP are associated (or correlated) with WisdomTree STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree STOXX Europe has no effect on the direction of Xtrackers i.e., Xtrackers and WisdomTree STOXX go up and down completely randomly.
Pair Corralation between Xtrackers and WisdomTree STOXX
Assuming the 90 days trading horizon Xtrackers SP is expected to generate 0.6 times more return on investment than WisdomTree STOXX. However, Xtrackers SP is 1.66 times less risky than WisdomTree STOXX. It trades about 0.15 of its potential returns per unit of risk. WisdomTree STOXX Europe is currently generating about -0.09 per unit of risk. If you would invest 20,040 in Xtrackers SP on September 26, 2024 and sell it today you would earn a total of 2,925 from holding Xtrackers SP or generate 14.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers SP vs. WisdomTree STOXX Europe
Performance |
Timeline |
Xtrackers SP |
WisdomTree STOXX Europe |
Xtrackers and WisdomTree STOXX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers and WisdomTree STOXX
The main advantage of trading using opposite Xtrackers and WisdomTree STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, WisdomTree STOXX 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 WisdomTree STOXX will offset losses from the drop in WisdomTree STOXX's long position.Xtrackers vs. UBS Fund Solutions | Xtrackers vs. Xtrackers II | Xtrackers vs. Xtrackers Nikkei 225 | Xtrackers vs. iShares VII PLC |
WisdomTree STOXX vs. UBS Fund Solutions | WisdomTree STOXX vs. Xtrackers II | WisdomTree STOXX vs. Xtrackers Nikkei 225 | WisdomTree STOXX vs. iShares VII PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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