Correlation Between Xtrackers ShortDAX and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and CNH Industrial 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 CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and CNH Industrial NV, you can compare the effects of market volatilities on Xtrackers ShortDAX and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and CNH Industrial.
Diversification Opportunities for Xtrackers ShortDAX and CNH Industrial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and CNH is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and CNH Industrial go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and CNH Industrial
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the CNH Industrial. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.34 times less risky than CNH Industrial. The etf trades about -0.02 of its potential returns per unit of risk. The CNH Industrial NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,121 in CNH Industrial NV on September 3, 2024 and sell it today you would earn a total of 70.00 from holding CNH Industrial NV or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. CNH Industrial NV
Performance |
| Timeline |
| Xtrackers ShortDAX |
| CNH Industrial NV |
Xtrackers ShortDAX and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and CNH Industrial
The main advantage of trading using opposite Xtrackers ShortDAX and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial'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 |
| CNH Industrial vs. MAGNUM MINING EXP | CNH Industrial vs. Calibre Mining Corp | CNH Industrial vs. PARKEN Sport Entertainment | CNH Industrial vs. GALENA MINING LTD |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |