Correlation Between Xtrackers ShortDAX and Cogobuy
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Cogobuy 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 Cogobuy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Cogobuy Group, you can compare the effects of market volatilities on Xtrackers ShortDAX and Cogobuy 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 Cogobuy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Cogobuy.
Diversification Opportunities for Xtrackers ShortDAX and Cogobuy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Cogobuy is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Cogobuy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogobuy Group 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 Cogobuy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogobuy Group has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Cogobuy go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Cogobuy
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.38 times more return on investment than Cogobuy. However, Xtrackers ShortDAX is 2.63 times less risky than Cogobuy. It trades about -0.1 of its potential returns per unit of risk. Cogobuy Group is currently generating about -0.12 per unit of risk. If you would invest 85.00 in Xtrackers ShortDAX on September 2, 2024 and sell it today you would lose (3.00) from holding Xtrackers ShortDAX or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Cogobuy Group
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Cogobuy Group |
Xtrackers ShortDAX and Cogobuy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Cogobuy
The main advantage of trading using opposite Xtrackers ShortDAX and Cogobuy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Cogobuy 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 Cogobuy will offset losses from the drop in Cogobuy'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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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