Correlation Between Xtrackers ShortDAX and Associated British
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Associated British 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 Associated British into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Associated British Foods, you can compare the effects of market volatilities on Xtrackers ShortDAX and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Associated British.
Diversification Opportunities for Xtrackers ShortDAX and Associated British
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Associated is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Associated British go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Associated British
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Associated British. In addition to that, Xtrackers ShortDAX is 1.24 times more volatile than Associated British Foods. It trades about -0.14 of its total potential returns per unit of risk. Associated British Foods is currently generating about -0.08 per unit of volatility. If you would invest 2,716 in Associated British Foods on September 4, 2024 and sell it today you would lose (60.00) from holding Associated British Foods or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Associated British Foods
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Associated British Foods |
Xtrackers ShortDAX and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Associated British
The main advantage of trading using opposite Xtrackers ShortDAX and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British'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 |
| Associated British vs. Cogent Communications Holdings | Associated British vs. Shenandoah Telecommunications | Associated British vs. Charter Communications | Associated British vs. Zoom Video Communications |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| CEOs Directory Screen CEOs from public companies around the world |