Correlation Between Xtrackers ShortDAX and Arion Banki
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Arion Banki 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 Arion Banki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Arion banki hf, you can compare the effects of market volatilities on Xtrackers ShortDAX and Arion Banki 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 Arion Banki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Arion Banki.
Diversification Opportunities for Xtrackers ShortDAX and Arion Banki
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Arion is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Arion banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arion banki hf 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 Arion Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arion banki hf has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Arion Banki go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Arion Banki
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Arion Banki. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.48 times less risky than Arion Banki. The etf trades about -0.31 of its potential returns per unit of risk. The Arion banki hf is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Arion banki hf on November 8, 2024 and sell it today you would lose (1.00) from holding Arion banki hf or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Arion banki hf
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Arion banki hf |
Xtrackers ShortDAX and Arion Banki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Arion Banki
The main advantage of trading using opposite Xtrackers ShortDAX and Arion Banki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Arion Banki 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 Arion Banki will offset losses from the drop in Arion Banki'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 |
| Arion Banki vs. Air Transport Services | Arion Banki vs. Daido Steel Co | Arion Banki vs. SPORT LISBOA E | Arion Banki vs. PARKEN Sport Entertainment |
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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