Correlation Between Xtrackers ShortDAX and Novanta
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Novanta 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 Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Novanta, you can compare the effects of market volatilities on Xtrackers ShortDAX and Novanta 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 Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Novanta.
Diversification Opportunities for Xtrackers ShortDAX and Novanta
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Novanta is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta 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 Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Novanta go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Novanta
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Novanta. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.34 times less risky than Novanta. The etf trades about -0.05 of its potential returns per unit of risk. The Novanta is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 15,000 in Novanta on August 26, 2024 and sell it today you would earn a total of 700.00 from holding Novanta or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Novanta
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Novanta |
Xtrackers ShortDAX and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Novanta
The main advantage of trading using opposite Xtrackers ShortDAX and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta'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 |
| Novanta vs. Ping An Insurance | Novanta vs. Zurich Insurance Group | Novanta vs. MagnaChip Semiconductor Corp | Novanta vs. Japan Post Insurance |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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