Correlation Between Xtrackers ShortDAX and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and FORWARD AIR 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 FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and FORWARD AIR P, you can compare the effects of market volatilities on Xtrackers ShortDAX and FORWARD AIR 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 FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and FORWARD AIR.
Diversification Opportunities for Xtrackers ShortDAX and FORWARD AIR
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and FORWARD is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P 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 FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and FORWARD AIR go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and FORWARD AIR
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.35 times more return on investment than FORWARD AIR. However, Xtrackers ShortDAX is 2.89 times less risky than FORWARD AIR. It trades about -0.04 of its potential returns per unit of risk. FORWARD AIR P is currently generating about -0.03 per unit of risk. If you would invest 120.00 in Xtrackers ShortDAX on August 27, 2024 and sell it today you would lose (36.00) from holding Xtrackers ShortDAX or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. FORWARD AIR P
Performance |
| Timeline |
| Xtrackers ShortDAX |
| FORWARD AIR P |
Xtrackers ShortDAX and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and FORWARD AIR
The main advantage of trading using opposite Xtrackers ShortDAX and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR'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 |
| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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