Correlation Between Xtrackers ShortDAX and Globant SA
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Globant SA 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 Globant SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Globant SA, you can compare the effects of market volatilities on Xtrackers ShortDAX and Globant SA 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 Globant SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Globant SA.
Diversification Opportunities for Xtrackers ShortDAX and Globant SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Globant is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA 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 Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Globant SA go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Globant SA
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Globant SA. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.54 times less risky than Globant SA. The etf trades about -0.05 of its potential returns per unit of risk. The Globant SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 18,020 in Globant SA on September 2, 2024 and sell it today you would earn a total of 3,530 from holding Globant SA or generate 19.59% 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. Globant SA
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Globant SA |
Xtrackers ShortDAX and Globant SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Globant SA
The main advantage of trading using opposite Xtrackers ShortDAX and Globant SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Globant SA 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 Globant SA will offset losses from the drop in Globant SA'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 |
| Globant SA vs. SPORT LISBOA E | Globant SA vs. Air Transport Services | Globant SA vs. SPORTING | Globant SA vs. USWE SPORTS AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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