Correlation Between Xtrackers ShortDAX and TRANSAT AT
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and TRANSAT AT 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 TRANSAT AT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and TRANSAT AT VAR, you can compare the effects of market volatilities on Xtrackers ShortDAX and TRANSAT AT 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 TRANSAT AT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and TRANSAT AT.
Diversification Opportunities for Xtrackers ShortDAX and TRANSAT AT
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and TRANSAT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and TRANSAT AT VAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSAT AT VAR 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 TRANSAT AT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSAT AT VAR has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and TRANSAT AT go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and TRANSAT AT
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the TRANSAT AT. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.64 times less risky than TRANSAT AT. The etf trades about -0.16 of its potential returns per unit of risk. The TRANSAT AT VAR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 120.00 in TRANSAT AT VAR on September 12, 2024 and sell it today you would earn a total of 6.00 from holding TRANSAT AT VAR or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. TRANSAT AT VAR
Performance |
| Timeline |
| Xtrackers ShortDAX |
| TRANSAT AT VAR |
Xtrackers ShortDAX and TRANSAT AT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and TRANSAT AT
The main advantage of trading using opposite Xtrackers ShortDAX and TRANSAT AT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, TRANSAT AT 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 TRANSAT AT will offset losses from the drop in TRANSAT AT's long position.| Xtrackers ShortDAX vs. UBS Fund Solutions | Xtrackers ShortDAX vs. Xtrackers II | Xtrackers ShortDAX vs. Xtrackers Nikkei 225 | Xtrackers ShortDAX vs. iShares VII PLC |
| TRANSAT AT vs. VIAPLAY GROUP AB | TRANSAT AT vs. Playa Hotels Resorts | TRANSAT AT vs. DATANG INTL POW | TRANSAT AT vs. PUBLIC STORAGE PRFO |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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