Correlation Between Xtrackers ShortDAX and Trip Group
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Trip Group 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 Trip Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Trip Group Limited, you can compare the effects of market volatilities on Xtrackers ShortDAX and Trip Group 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 Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Trip Group.
Diversification Opportunities for Xtrackers ShortDAX and Trip Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Trip is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Trip Group go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Trip Group
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 16.73 times less return on investment than Trip Group. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.72 times less risky than Trip Group. It trades about 0.01 of its potential returns per unit of risk. Trip Group Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,840 in Trip Group Limited on August 31, 2024 and sell it today you would earn a total of 180.00 from holding Trip Group Limited or generate 3.08% 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. Trip Group Limited
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Trip Group Limited |
Xtrackers ShortDAX and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Trip Group
The main advantage of trading using opposite Xtrackers ShortDAX and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group'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 |
| Trip Group vs. Microbot Medical | Trip Group vs. MeVis Medical Solutions | Trip Group vs. PUBLIC STORAGE PRFO | Trip Group vs. Avanos Medical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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