Correlation Between Xtrackers ShortDAX and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Postal Savings 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 Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Postal Savings Bank, you can compare the effects of market volatilities on Xtrackers ShortDAX and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Postal Savings.
Diversification Opportunities for Xtrackers ShortDAX and Postal Savings
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Postal is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Postal Savings go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Postal Savings
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.82 times more return on investment than Postal Savings. However, Xtrackers ShortDAX is 1.22 times less risky than Postal Savings. It trades about 0.08 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.01 per unit of risk. If you would invest 82.00 in Xtrackers ShortDAX on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Xtrackers ShortDAX or generate 2.44% 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. Postal Savings Bank
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Postal Savings Bank |
Xtrackers ShortDAX and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Postal Savings
The main advantage of trading using opposite Xtrackers ShortDAX and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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