Correlation Between Xtrackers ShortDAX and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Compagnie Plastic 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 Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Xtrackers ShortDAX and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Compagnie Plastic.
Diversification Opportunities for Xtrackers ShortDAX and Compagnie Plastic
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Compagnie is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Compagnie Plastic
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.59 times more return on investment than Compagnie Plastic. However, Xtrackers ShortDAX is 1.71 times less risky than Compagnie Plastic. It trades about 0.08 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.17 per unit of risk. If you would invest 82.00 in Xtrackers ShortDAX on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Xtrackers ShortDAX or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Compagnie Plastic Omnium |
Xtrackers ShortDAX and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Compagnie Plastic
The main advantage of trading using opposite Xtrackers ShortDAX and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic'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 |
| Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech | Compagnie Plastic 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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