Correlation Between Capital Group and Xtrackers Short
Can any of the company-specific risk be diversified away by investing in both Capital Group and Xtrackers Short 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 Capital Group and Xtrackers Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Core and Xtrackers Short Duration, you can compare the effects of market volatilities on Capital Group and Xtrackers Short 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 Capital Group with a short position of Xtrackers Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and Xtrackers Short.
Diversification Opportunities for Capital Group and Xtrackers Short
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Xtrackers is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Core and Xtrackers Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Short Duration and Capital Group 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 Capital Group Core are associated (or correlated) with Xtrackers Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Short Duration has no effect on the direction of Capital Group i.e., Capital Group and Xtrackers Short go up and down completely randomly.
Pair Corralation between Capital Group and Xtrackers Short
Given the investment horizon of 90 days Capital Group is expected to generate 43.27 times less return on investment than Xtrackers Short. In addition to that, Capital Group is 1.68 times more volatile than Xtrackers Short Duration. It trades about 0.0 of its total potential returns per unit of risk. Xtrackers Short Duration is currently generating about 0.28 per unit of volatility. If you would invest 4,411 in Xtrackers Short Duration on September 2, 2024 and sell it today you would earn a total of 136.00 from holding Xtrackers Short Duration or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group Core vs. Xtrackers Short Duration
Performance |
| Timeline |
| Capital Group Core |
| Xtrackers Short Duration |
Capital Group and Xtrackers Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and Xtrackers Short
The main advantage of trading using opposite Capital Group and Xtrackers Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group position performs unexpectedly, Xtrackers Short 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 Short will offset losses from the drop in Xtrackers Short's long position.| Capital Group vs. Capital Group Dividend | Capital Group vs. Capital Group Core | Capital Group vs. Capital Group Growth | Capital Group vs. Capital Group Global |
| Xtrackers Short vs. Xtrackers High Beta | Xtrackers Short vs. Xtrackers Low Beta | Xtrackers Short vs. iShares Edge High | Xtrackers Short vs. PGIM Active High |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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