Correlation Between Xtrackers ShortDAX and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and GOLD ROAD RES, you can compare the effects of market volatilities on Xtrackers ShortDAX and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and GOLD ROAD.
Diversification Opportunities for Xtrackers ShortDAX and GOLD ROAD
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and GOLD is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and GOLD ROAD go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and GOLD ROAD
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the GOLD ROAD. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.82 times less risky than GOLD ROAD. The etf trades about -0.05 of its potential returns per unit of risk. The GOLD ROAD RES is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 112.00 in GOLD ROAD RES on August 28, 2024 and sell it today you would earn a total of 1.00 from holding GOLD ROAD RES or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. GOLD ROAD RES
Performance |
| Timeline |
| Xtrackers ShortDAX |
| GOLD ROAD RES |
Xtrackers ShortDAX and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and GOLD ROAD
The main advantage of trading using opposite Xtrackers ShortDAX and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD'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 |
| GOLD ROAD vs. FARO Technologies | GOLD ROAD vs. REGAL ASIAN INVESTMENTS | GOLD ROAD vs. MGIC INVESTMENT | GOLD ROAD vs. THORNEY TECHS LTD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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