Correlation Between Barclays ETN and Alerian MLP
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Alerian MLP 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 Barclays ETN and Alerian MLP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and Alerian MLP ETF, you can compare the effects of market volatilities on Barclays ETN and Alerian MLP 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 Barclays ETN with a short position of Alerian MLP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Alerian MLP.
Diversification Opportunities for Barclays ETN and Alerian MLP
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barclays and Alerian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Alerian MLP ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerian MLP ETF and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with Alerian MLP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerian MLP ETF has no effect on the direction of Barclays ETN i.e., Barclays ETN and Alerian MLP go up and down completely randomly.
Pair Corralation between Barclays ETN and Alerian MLP
Given the investment horizon of 90 days Barclays ETN is expected to generate 1.96 times less return on investment than Alerian MLP. In addition to that, Barclays ETN is 1.16 times more volatile than Alerian MLP ETF. It trades about 0.04 of its total potential returns per unit of risk. Alerian MLP ETF is currently generating about 0.08 per unit of volatility. If you would invest 4,701 in Alerian MLP ETF on June 2, 2025 and sell it today you would earn a total of 169.00 from holding Alerian MLP ETF or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Alerian MLP ETF
Performance |
| Timeline |
| Barclays ETN Select |
| Alerian MLP ETF |
Barclays ETN and Alerian MLP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Alerian MLP
The main advantage of trading using opposite Barclays ETN and Alerian MLP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Alerian MLP 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 Alerian MLP will offset losses from the drop in Alerian MLP's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise Capital Series |
| Alerian MLP vs. Global X MLP | Alerian MLP vs. Plains All American | Alerian MLP vs. iShares Preferred and |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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