Correlation Between Xtrackers ShortDAX and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and BJs Wholesale 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 BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and BJs Wholesale Club, you can compare the effects of market volatilities on Xtrackers ShortDAX and BJs Wholesale 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 BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and BJs Wholesale.
Diversification Opportunities for Xtrackers ShortDAX and BJs Wholesale
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and BJs is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club 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 BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and BJs Wholesale go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and BJs Wholesale
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the BJs Wholesale. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.08 times less risky than BJs Wholesale. The etf trades about -0.04 of its potential returns per unit of risk. The BJs Wholesale Club is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,750 in BJs Wholesale Club on August 31, 2024 and sell it today you would earn a total of 3,300 from holding BJs Wholesale Club or generate 57.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. BJs Wholesale Club
Performance |
| Timeline |
| Xtrackers ShortDAX |
| BJs Wholesale Club |
Xtrackers ShortDAX and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and BJs Wholesale
The main advantage of trading using opposite Xtrackers ShortDAX and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale'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 |
| BJs Wholesale vs. COPLAND ROAD CAPITAL | BJs Wholesale vs. Natural Health Trends | BJs Wholesale vs. EVS Broadcast Equipment | BJs Wholesale vs. EPSILON HEALTHCARE LTD |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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