Correlation Between S1YM34 and Trend Etf

Can any of the company-specific risk be diversified away by investing in both S1YM34 and Trend 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 S1YM34 and Trend Etf into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between S1YM34 and Trend Etf Msci, you can compare the effects of market volatilities on S1YM34 and Trend 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 S1YM34 with a short position of Trend Etf. Check out your portfolio center. Please also check ongoing floating volatility patterns of S1YM34 and Trend Etf.

Diversification Opportunities for S1YM34 and Trend Etf

0.81

Correlation Coefficient

S1YM34  Trend Etf

Very poor diversification

The 3 months correlation between S1YM34 and Trend is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding S1YM34 and Trend Etf Msci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trend Etf Msci and S1YM34 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 S1YM34 are associated (or correlated) with Trend Etf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trend Etf Msci has no effect on the direction of S1YM34 i.e., S1YM34 and Trend Etf go up and down completely randomly.

Pair Corralation between S1YM34 and Trend Etf

Assuming the 90 days trading horizon S1YM34 is expected to generate 2.42 times more return on investment than Trend Etf. However, S1YM34 is 2.42 times more volatile than Trend Etf Msci. It trades about 0.05 of its potential returns per unit of risk. Trend Etf Msci is currently generating about 0.12 per unit of risk. If you would invest  11,914  in S1YM34 on September 23, 2024 and sell it today you would earn a total of  5,979  from holding S1YM34 or generate 50.18% return on investment over 90 days.

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

S1YM34  vs.  Trend Etf Msci

S1YM34

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in S1YM34 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, S1YM34 sustained solid returns over the last few months and may actually be approaching a breakup point.

Trend Etf Msci

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trend Etf Msci are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Trend Etf may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with S1YM34 and Trend Etf

The main advantage of trading using opposite S1YM34 and Trend Etf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S1YM34 position performs unexpectedly, Trend 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 Trend Etf will offset losses from the drop in Trend Etf's long position.

The idea behind S1YM34 and Trend Etf Msci 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.