Correlation Between Xtrackers ShortDAX and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Xtrackers ShortDAX and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and MEDICAL FACILITIES.
Diversification Opportunities for Xtrackers ShortDAX and MEDICAL FACILITIES
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and MEDICAL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and MEDICAL FACILITIES
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the MEDICAL FACILITIES. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.44 times less risky than MEDICAL FACILITIES. The etf trades about -0.02 of its potential returns per unit of risk. The MEDICAL FACILITIES NEW is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 828.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 252.00 from holding MEDICAL FACILITIES NEW or generate 30.43% 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. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Xtrackers ShortDAX |
| MEDICAL FACILITIES NEW |
Xtrackers ShortDAX and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and MEDICAL FACILITIES
The main advantage of trading using opposite Xtrackers ShortDAX and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES'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 |
| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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