Correlation Between Xtrackers ShortDAX and Kinder Morgan
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Kinder Morgan 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 Kinder Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Kinder Morgan, you can compare the effects of market volatilities on Xtrackers ShortDAX and Kinder Morgan 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 Kinder Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Kinder Morgan.
Diversification Opportunities for Xtrackers ShortDAX and Kinder Morgan
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Kinder is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Kinder Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinder Morgan 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 Kinder Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinder Morgan has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Kinder Morgan go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Kinder Morgan
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Kinder Morgan. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.73 times less risky than Kinder Morgan. The etf trades about -0.07 of its potential returns per unit of risk. The Kinder Morgan is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,246 in Kinder Morgan on September 1, 2024 and sell it today you would earn a total of 403.00 from holding Kinder Morgan or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Kinder Morgan
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Kinder Morgan |
Xtrackers ShortDAX and Kinder Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Kinder Morgan
The main advantage of trading using opposite Xtrackers ShortDAX and Kinder Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Kinder Morgan 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 Kinder Morgan will offset losses from the drop in Kinder Morgan'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 |
| Kinder Morgan vs. Harmony Gold Mining | Kinder Morgan vs. Rogers Communications | Kinder Morgan vs. Ribbon Communications | Kinder Morgan vs. SK TELECOM TDADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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