Correlation Between Xtrackers Harvest and PDD Holdings
Can any of the company-specific risk be diversified away by investing in both Xtrackers Harvest and PDD Holdings 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 Xtrackers Harvest and PDD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Harvest CSI and PDD Holdings, you can compare the effects of market volatilities on Xtrackers Harvest and PDD Holdings 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 Harvest with a short position of PDD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Harvest and PDD Holdings.
Diversification Opportunities for Xtrackers Harvest and PDD Holdings
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xtrackers and PDD is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Harvest CSI and PDD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDD Holdings and Xtrackers Harvest 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 Harvest CSI are associated (or correlated) with PDD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDD Holdings has no effect on the direction of Xtrackers Harvest i.e., Xtrackers Harvest and PDD Holdings go up and down completely randomly.
Pair Corralation between Xtrackers Harvest and PDD Holdings
Given the investment horizon of 90 days Xtrackers Harvest CSI is expected to generate 0.62 times more return on investment than PDD Holdings. However, Xtrackers Harvest CSI is 1.61 times less risky than PDD Holdings. It trades about 0.04 of its potential returns per unit of risk. PDD Holdings is currently generating about -0.06 per unit of risk. If you would invest 2,458 in Xtrackers Harvest CSI on August 25, 2024 and sell it today you would earn a total of 205.00 from holding Xtrackers Harvest CSI or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Harvest CSI vs. PDD Holdings
Performance |
| Timeline |
| Xtrackers Harvest CSI |
| PDD Holdings |
Xtrackers Harvest and PDD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Harvest and PDD Holdings
The main advantage of trading using opposite Xtrackers Harvest and PDD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Harvest position performs unexpectedly, PDD Holdings 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 PDD Holdings will offset losses from the drop in PDD Holdings' long position.| Xtrackers Harvest vs. iShares MSCI China | Xtrackers Harvest vs. Xtrackers Harvest CSI | Xtrackers Harvest vs. Direxion Daily CSI | Xtrackers Harvest vs. KraneShares CSI China |
| PDD Holdings vs. Sea | PDD Holdings vs. Wayfair | PDD Holdings vs. Chewy Inc | PDD Holdings vs. Vipshop Holdings Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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