Correlation Between ARK 21Shares and Xtrackers MSCI

Can any of the company-specific risk be diversified away by investing in both ARK 21Shares and Xtrackers MSCI 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 ARK 21Shares and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARK 21Shares Active and Xtrackers MSCI Europe, you can compare the effects of market volatilities on ARK 21Shares and Xtrackers MSCI 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 ARK 21Shares with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK 21Shares and Xtrackers MSCI.

Diversification Opportunities for ARK 21Shares and Xtrackers MSCI

-0.25

Correlation Coefficient

ARK 21Shares  Xtrackers MSCI

Very good diversification

The 3 months correlation between ARK and Xtrackers is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ARK 21Shares Active and Xtrackers MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Europe and ARK 21Shares 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 ARK 21Shares Active are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Europe has no effect on the direction of ARK 21Shares i.e., ARK 21Shares and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between ARK 21Shares and Xtrackers MSCI

If you would invest  4,257  in Xtrackers MSCI Europe on May 6, 2025 and sell it today you would earn a total of  119.00  from holding Xtrackers MSCI Europe or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

ARK 21Shares Active  vs.  Xtrackers MSCI Europe

ARK 21Shares Active

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARK 21Shares Active has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, ARK 21Shares is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Xtrackers MSCI Europe

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI Europe are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Xtrackers MSCI is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ARK 21Shares and Xtrackers MSCI

The main advantage of trading using opposite ARK 21Shares and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK 21Shares position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.

The idea behind ARK 21Shares Active and Xtrackers MSCI Europe 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 CEOs Directory module to screen CEOs from public companies around the world.