Correlation Between Xtrackers ShortDAX and AGCO
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and AGCO 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 AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and AGCO Corporation, you can compare the effects of market volatilities on Xtrackers ShortDAX and AGCO 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 AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and AGCO.
Diversification Opportunities for Xtrackers ShortDAX and AGCO
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and AGCO is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO 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 AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and AGCO go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and AGCO
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 1.7 times less return on investment than AGCO. But when comparing it to its historical volatility, Xtrackers ShortDAX is 2.0 times less risky than AGCO. It trades about 0.08 of its potential returns per unit of risk. AGCO Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,236 in AGCO Corporation on August 29, 2024 and sell it today you would earn a total of 330.00 from holding AGCO Corporation or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. AGCO Corp.
Performance |
| Timeline |
| Xtrackers ShortDAX |
| AGCO |
Xtrackers ShortDAX and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and AGCO
The main advantage of trading using opposite Xtrackers ShortDAX and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO'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 |
| AGCO vs. Superior Plus Corp | AGCO vs. NMI Holdings | AGCO vs. Origin Agritech | AGCO vs. SIVERS SEMICONDUCTORS AB |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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