Correlation Between Xtrackers ShortDAX and American States
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and American States 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 American States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and American States Water, you can compare the effects of market volatilities on Xtrackers ShortDAX and American States 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 American States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and American States.
Diversification Opportunities for Xtrackers ShortDAX and American States
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water 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 American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and American States go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and American States
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the American States. In addition to that, Xtrackers ShortDAX is 1.0 times more volatile than American States Water. It trades about -0.07 of its total potential returns per unit of risk. American States Water is currently generating about 0.21 per unit of volatility. If you would invest 7,496 in American States Water on September 1, 2024 and sell it today you would earn a total of 529.00 from holding American States Water or generate 7.06% 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. American States Water
Performance |
| Timeline |
| Xtrackers ShortDAX |
| American States Water |
Xtrackers ShortDAX and American States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and American States
The main advantage of trading using opposite Xtrackers ShortDAX and American States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, American States 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 American States will offset losses from the drop in American States' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| American States vs. MYFAIR GOLD P | American States vs. Calibre Mining Corp | American States vs. DELTA AIR LINES | American States vs. VIVA WINE GROUP |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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