Correlation Between Xtrackers ShortDAX and Adobe
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Adobe 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 Adobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Adobe Inc, you can compare the effects of market volatilities on Xtrackers ShortDAX and Adobe 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 Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Adobe.
Diversification Opportunities for Xtrackers ShortDAX and Adobe
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Adobe is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Adobe go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Adobe
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 1.58 times less return on investment than Adobe. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.65 times less risky than Adobe. It trades about 0.12 of its potential returns per unit of risk. Adobe Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 44,555 in Adobe Inc on August 25, 2024 and sell it today you would earn a total of 2,450 from holding Adobe Inc or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Adobe Inc
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Adobe Inc |
Xtrackers ShortDAX and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Adobe
The main advantage of trading using opposite Xtrackers ShortDAX and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe'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 |
| Adobe vs. National Bank Holdings | Adobe vs. Webster Financial | Adobe vs. IMPERIAL TOBACCO | Adobe vs. Chiba Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |