Correlation Between Leverage Shares and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Leverage Shares 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 Leverage Shares and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and Xtrackers MSCI, you can compare the effects of market volatilities on Leverage Shares 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 Leverage Shares with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Xtrackers MSCI.
Diversification Opportunities for Leverage Shares and Xtrackers MSCI
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leverage and Xtrackers is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and Xtrackers MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI and Leverage Shares 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 Leverage Shares 3x 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 has no effect on the direction of Leverage Shares i.e., Leverage Shares and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Leverage Shares and Xtrackers MSCI
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 5.07 times more return on investment than Xtrackers MSCI. However, Leverage Shares is 5.07 times more volatile than Xtrackers MSCI. It trades about 0.14 of its potential returns per unit of risk. Xtrackers MSCI is currently generating about -0.19 per unit of risk. If you would invest 3,211 in Leverage Shares 3x on August 24, 2024 and sell it today you would earn a total of 523.00 from holding Leverage Shares 3x or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. Xtrackers MSCI
Performance |
| Timeline |
| Leverage Shares 3x |
| Xtrackers MSCI |
Leverage Shares and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Xtrackers MSCI
The main advantage of trading using opposite Leverage Shares and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares 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.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. WisdomTree Silver 3x | Leverage Shares vs. Lyxor 10Y Inflation |
| Xtrackers MSCI vs. Leverage Shares 3x | Xtrackers MSCI vs. WisdomTree SP 500 | Xtrackers MSCI vs. WisdomTree Silver 3x | Xtrackers MSCI vs. Leverage Shares 3x |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| CEOs Directory Screen CEOs from public companies around the world |