Correlation Between Xtrackers ShortDAX and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Axfood AB 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 Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Axfood AB, you can compare the effects of market volatilities on Xtrackers ShortDAX and Axfood AB 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 Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Axfood AB.
Diversification Opportunities for Xtrackers ShortDAX and Axfood AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Axfood is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Axfood AB go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Axfood AB
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.84 times more return on investment than Axfood AB. However, Xtrackers ShortDAX is 1.19 times less risky than Axfood AB. It trades about -0.03 of its potential returns per unit of risk. Axfood AB is currently generating about -0.03 per unit of risk. If you would invest 85.00 in Xtrackers ShortDAX on August 31, 2024 and sell it today you would lose (1.00) from holding Xtrackers ShortDAX or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Axfood AB
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Axfood AB |
Xtrackers ShortDAX and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Axfood AB
The main advantage of trading using opposite Xtrackers ShortDAX and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB'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 |
| Axfood AB vs. Sysco | Axfood AB vs. Jernimo Martins SGPS | Axfood AB vs. Bunzl plc | Axfood AB vs. Performance Food Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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