Correlation Between Xtrackers ShortDAX and Aarons
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Aarons 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 Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and The Aarons, you can compare the effects of market volatilities on Xtrackers ShortDAX and Aarons 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 Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Aarons.
Diversification Opportunities for Xtrackers ShortDAX and Aarons
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Aarons is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons 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 Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Aarons go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Aarons
If you would invest 82.00 in Xtrackers ShortDAX on August 27, 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 | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. The Aarons
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Xtrackers ShortDAX and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Aarons
The main advantage of trading using opposite Xtrackers ShortDAX and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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