Correlation Between Xtrackers ShortDAX and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Airbus SE, you can compare the effects of market volatilities on Xtrackers ShortDAX and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Airbus SE.
Diversification Opportunities for Xtrackers ShortDAX and Airbus SE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Airbus is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Airbus SE go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Airbus SE
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Airbus SE. In addition to that, Xtrackers ShortDAX is 1.14 times more volatile than Airbus SE. It trades about -0.04 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.04 per unit of volatility. If you would invest 12,699 in Airbus SE on September 1, 2024 and sell it today you would earn a total of 2,061 from holding Airbus SE or generate 16.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Airbus SE
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Airbus SE |
Xtrackers ShortDAX and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Airbus SE
The main advantage of trading using opposite Xtrackers ShortDAX and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE'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 |
| Airbus SE vs. Insteel Industries | Airbus SE vs. DEVRY EDUCATION GRP | Airbus SE vs. Caltagirone SpA | Airbus SE vs. IDP EDUCATION LTD |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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