Correlation Between Xtrackers ShortDAX and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and KAUFMAN ET 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 KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and KAUFMAN ET BROAD, you can compare the effects of market volatilities on Xtrackers ShortDAX and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and KAUFMAN ET.
Diversification Opportunities for Xtrackers ShortDAX and KAUFMAN ET
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and KAUFMAN is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and KAUFMAN ET
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the KAUFMAN ET. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.2 times less risky than KAUFMAN ET. The etf trades about -0.05 of its potential returns per unit of risk. The KAUFMAN ET BROAD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,271 in KAUFMAN ET BROAD on August 25, 2024 and sell it today you would earn a total of 939.00 from holding KAUFMAN ET BROAD or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Xtrackers ShortDAX |
| KAUFMAN ET BROAD |
Xtrackers ShortDAX and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and KAUFMAN ET
The main advantage of trading using opposite Xtrackers ShortDAX and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET'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 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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