Correlation Between Nova Europe and Xtrackers LevDAX
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By analyzing existing cross correlation between Nova Europe ISR and Xtrackers LevDAX, you can compare the effects of market volatilities on Nova Europe and Xtrackers LevDAX 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 Nova Europe with a short position of Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Europe and Xtrackers LevDAX.
Diversification Opportunities for Nova Europe and Xtrackers LevDAX
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nova and Xtrackers is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nova Europe ISR and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX and Nova Europe 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 Nova Europe ISR are associated (or correlated) with Xtrackers LevDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers LevDAX has no effect on the direction of Nova Europe i.e., Nova Europe and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between Nova Europe and Xtrackers LevDAX
Assuming the 90 days trading horizon Nova Europe ISR is expected to under-perform the Xtrackers LevDAX. But the fund apears to be less risky and, when comparing its historical volatility, Nova Europe ISR is 2.07 times less risky than Xtrackers LevDAX. The fund trades about -0.04 of its potential returns per unit of risk. The Xtrackers LevDAX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,306 in Xtrackers LevDAX on September 5, 2024 and sell it today you would earn a total of 8,784 from holding Xtrackers LevDAX or generate 77.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Europe ISR vs. Xtrackers LevDAX
Performance |
| Timeline |
| Nova Europe ISR |
| Xtrackers LevDAX |
Nova Europe and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Europe and Xtrackers LevDAX
The main advantage of trading using opposite Nova Europe and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Europe position performs unexpectedly, Xtrackers LevDAX 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 LevDAX will offset losses from the drop in Xtrackers LevDAX's long position.The idea behind Nova Europe ISR and Xtrackers LevDAX 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.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
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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