Correlation Between Xtrackers ShortDAX and YAOKO CO
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and YAOKO CO 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 YAOKO CO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and YAOKO LTD, you can compare the effects of market volatilities on Xtrackers ShortDAX and YAOKO CO 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 YAOKO CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and YAOKO CO.
Diversification Opportunities for Xtrackers ShortDAX and YAOKO CO
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and YAOKO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and YAOKO LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YAOKO LTD 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 YAOKO CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YAOKO LTD has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and YAOKO CO go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and YAOKO CO
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 1.11 times more return on investment than YAOKO CO. However, Xtrackers ShortDAX is 1.11 times more volatile than YAOKO LTD. It trades about 0.08 of its potential returns per unit of risk. YAOKO LTD is currently generating about 0.07 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. YAOKO LTD
Performance |
| Timeline |
| Xtrackers ShortDAX |
| YAOKO LTD |
Xtrackers ShortDAX and YAOKO CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and YAOKO CO
The main advantage of trading using opposite Xtrackers ShortDAX and YAOKO CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, YAOKO CO 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 YAOKO CO will offset losses from the drop in YAOKO CO'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 |
| YAOKO CO vs. Superior Plus Corp | YAOKO CO vs. NMI Holdings | YAOKO CO vs. Origin Agritech | YAOKO CO vs. SIVERS SEMICONDUCTORS AB |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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