Correlation Between Xtrackers ShortDAX and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and CDN IMPERIAL 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 CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Xtrackers ShortDAX and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and CDN IMPERIAL.
Diversification Opportunities for Xtrackers ShortDAX and CDN IMPERIAL
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and CDN is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and CDN IMPERIAL
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 3.58 times less return on investment than CDN IMPERIAL. In addition to that, Xtrackers ShortDAX is 1.76 times more volatile than CDN IMPERIAL BANK. It trades about 0.04 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.26 per unit of volatility. If you would invest 5,838 in CDN IMPERIAL BANK on August 30, 2024 and sell it today you would earn a total of 306.00 from holding CDN IMPERIAL BANK or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Xtrackers ShortDAX |
| CDN IMPERIAL BANK |
Xtrackers ShortDAX and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and CDN IMPERIAL
The main advantage of trading using opposite Xtrackers ShortDAX and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL'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 |
| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Superior Plus Corp | CDN IMPERIAL 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |