Correlation Between Xtrackers ShortDAX and CITIC
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and CITIC 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 CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and CITIC Limited, you can compare the effects of market volatilities on Xtrackers ShortDAX and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and CITIC.
Diversification Opportunities for Xtrackers ShortDAX and CITIC
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and CITIC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and CITIC go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and CITIC
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.93 times more return on investment than CITIC. However, Xtrackers ShortDAX is 1.08 times less risky than CITIC. It trades about 0.12 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.03 per unit of risk. If you would invest 83.00 in Xtrackers ShortDAX on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Xtrackers ShortDAX or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. CITIC Limited
Performance |
| Timeline |
| Xtrackers ShortDAX |
| CITIC Limited |
Xtrackers ShortDAX and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and CITIC
The main advantage of trading using opposite Xtrackers ShortDAX and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC'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 |
| CITIC vs. MEDICAL FACILITIES NEW | CITIC vs. ONWARD MEDICAL BV | CITIC vs. Advanced Medical Solutions | CITIC vs. MAGNUM MINING EXP |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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