Correlation Between Xtrackers ShortDAX and Cal Maine
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Cal Maine 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 Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Cal Maine Foods, you can compare the effects of market volatilities on Xtrackers ShortDAX and Cal Maine 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 Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Cal Maine.
Diversification Opportunities for Xtrackers ShortDAX and Cal Maine
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Cal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Cal Maine go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Cal Maine
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 4.15 times less return on investment than Cal Maine. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.03 times less risky than Cal Maine. It trades about 0.08 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 8,220 in Cal Maine Foods on August 28, 2024 and sell it today you would earn a total of 932.00 from holding Cal Maine Foods or generate 11.34% 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. Cal Maine Foods
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Cal Maine Foods |
Xtrackers ShortDAX and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Cal Maine
The main advantage of trading using opposite Xtrackers ShortDAX and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine'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 |
| Cal Maine vs. SEKISUI CHEMICAL | Cal Maine vs. Quaker Chemical | Cal Maine vs. Boiron SA | Cal Maine vs. SBM OFFSHORE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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