Correlation Between Xtrackers ShortDAX and Air Products
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Air Products and, you can compare the effects of market volatilities on Xtrackers ShortDAX and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Air Products.
Diversification Opportunities for Xtrackers ShortDAX and Air Products
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Air is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Air Products go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Air Products
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Air Products. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.15 times less risky than Air Products. The etf trades about -0.04 of its potential returns per unit of risk. The Air Products and is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 26,242 in Air Products and on August 28, 2024 and sell it today you would earn a total of 5,428 from holding Air Products and or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Air Products and
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Air Products |
Xtrackers ShortDAX and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Air Products
The main advantage of trading using opposite Xtrackers ShortDAX and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Air Products vs. Major Drilling Group | Air Products vs. CECO ENVIRONMENTAL | Air Products vs. Perma Fix Environmental Services | Air Products vs. CosmoSteel Holdings Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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