Correlation Between Xtrackers ShortDAX and Catalent
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Catalent 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 ShortDAX and Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Catalent, you can compare the effects of market volatilities on Xtrackers ShortDAX and Catalent 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 ShortDAX with a short position of Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Catalent.
Diversification Opportunities for Xtrackers ShortDAX and Catalent
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Catalent is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent and Xtrackers ShortDAX 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 ShortDAX are associated (or correlated) with Catalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalent has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Catalent go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Catalent
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Catalent. In addition to that, Xtrackers ShortDAX is 2.09 times more volatile than Catalent. It trades about -0.02 of its total potential returns per unit of risk. Catalent is currently generating about 0.13 per unit of volatility. If you would invest 5,029 in Catalent on September 3, 2024 and sell it today you would earn a total of 697.00 from holding Catalent or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Catalent
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Catalent |
Xtrackers ShortDAX and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Catalent
The main advantage of trading using opposite Xtrackers ShortDAX and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Catalent 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 Catalent will offset losses from the drop in Catalent's long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |