Correlation Between Xtrackers ShortDAX and BROOKFBH 462
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and BROOKFBH 462 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 BROOKFBH 462 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and BROOKFBH 462 PRSNU, you can compare the effects of market volatilities on Xtrackers ShortDAX and BROOKFBH 462 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 BROOKFBH 462. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and BROOKFBH 462.
Diversification Opportunities for Xtrackers ShortDAX and BROOKFBH 462
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and BROOKFBH is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and BROOKFBH 462 PRSNU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKFBH 462 PRSNU 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 BROOKFBH 462. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKFBH 462 PRSNU has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and BROOKFBH 462 go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and BROOKFBH 462
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the BROOKFBH 462. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.27 times less risky than BROOKFBH 462. The etf trades about -0.04 of its potential returns per unit of risk. The BROOKFBH 462 PRSNU is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,296 in BROOKFBH 462 PRSNU on August 29, 2024 and sell it today you would earn a total of 261.00 from holding BROOKFBH 462 PRSNU or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.26% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. BROOKFBH 462 PRSNU
Performance |
| Timeline |
| Xtrackers ShortDAX |
| BROOKFBH 462 PRSNU |
Xtrackers ShortDAX and BROOKFBH 462 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and BROOKFBH 462
The main advantage of trading using opposite Xtrackers ShortDAX and BROOKFBH 462 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, BROOKFBH 462 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 BROOKFBH 462 will offset losses from the drop in BROOKFBH 462'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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