Correlation Between Xtrackers MSCI and WisdomTree STOXX
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By analyzing existing cross correlation between Xtrackers MSCI World and WisdomTree STOXX Europe, you can compare the effects of market volatilities on Xtrackers MSCI 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 MSCI with a short position of WisdomTree STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and WisdomTree STOXX.
Diversification Opportunities for Xtrackers MSCI and WisdomTree STOXX
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and WisdomTree is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI World 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 MSCI 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 MSCI World 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 MSCI i.e., Xtrackers MSCI and WisdomTree STOXX go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and WisdomTree STOXX
Assuming the 90 days trading horizon Xtrackers MSCI World is expected to generate 0.51 times more return on investment than WisdomTree STOXX. However, Xtrackers MSCI World is 1.95 times less risky than WisdomTree STOXX. It trades about 0.18 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 8,131 in Xtrackers MSCI World on September 26, 2024 and sell it today you would earn a total of 1,220 from holding Xtrackers MSCI World or generate 15.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers MSCI World vs. WisdomTree STOXX Europe
Performance |
Timeline |
Xtrackers MSCI World |
WisdomTree STOXX Europe |
Xtrackers MSCI and WisdomTree STOXX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers MSCI and WisdomTree STOXX
The main advantage of trading using opposite Xtrackers MSCI and WisdomTree STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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 MSCI vs. UBS Fund Solutions | Xtrackers MSCI vs. Xtrackers II | Xtrackers MSCI vs. Xtrackers Nikkei 225 | Xtrackers MSCI 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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