Correlation Between Xtrackers ShortDAX and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and SIEMENS ENERGY 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 SIEMENS ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and SIEMENS ENERGY AG, you can compare the effects of market volatilities on Xtrackers ShortDAX and SIEMENS ENERGY 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 SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and SIEMENS ENERGY.
Diversification Opportunities for Xtrackers ShortDAX and SIEMENS ENERGY
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and SIEMENS is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG 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 SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and SIEMENS ENERGY
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 11.18 times less return on investment than SIEMENS ENERGY. But when comparing it to its historical volatility, Xtrackers ShortDAX is 2.0 times less risky than SIEMENS ENERGY. It trades about 0.08 of its potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,680 in SIEMENS ENERGY AG on August 29, 2024 and sell it today you would earn a total of 1,280 from holding SIEMENS ENERGY AG or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. SIEMENS ENERGY AG
Performance |
| Timeline |
| Xtrackers ShortDAX |
| SIEMENS ENERGY AG |
Xtrackers ShortDAX and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and SIEMENS ENERGY
The main advantage of trading using opposite Xtrackers ShortDAX and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, SIEMENS ENERGY 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 SIEMENS ENERGY will offset losses from the drop in SIEMENS ENERGY'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 |
| SIEMENS ENERGY vs. CN YANGTPWR GDR | SIEMENS ENERGY vs. Datang International Power | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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