Correlation Between Xtrackers ShortDAX and FF Global
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and FF Global 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 FF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and FF Global, you can compare the effects of market volatilities on Xtrackers ShortDAX and FF Global 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 FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and FF Global.
Diversification Opportunities for Xtrackers ShortDAX and FF Global
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and FJ2P is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global 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 FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and FF Global go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and FF Global
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the FF Global. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.03 times less risky than FF Global. The etf trades about -0.09 of its potential returns per unit of risk. The FF Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,635 in FF Global on September 13, 2024 and sell it today you would earn a total of 813.00 from holding FF Global or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.66% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. FF Global
Performance |
| Timeline |
| Xtrackers ShortDAX |
| FF Global |
Xtrackers ShortDAX and FF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and FF Global
The main advantage of trading using opposite Xtrackers ShortDAX and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, FF Global 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 FF Global will offset losses from the drop in FF Global's long position.| Xtrackers ShortDAX vs. UBS Fund Solutions | Xtrackers ShortDAX vs. Xtrackers II | Xtrackers ShortDAX vs. Xtrackers Nikkei 225 | Xtrackers ShortDAX vs. iShares VII PLC |
| FF Global vs. Azvalor Global Value | FF Global vs. JPM Global Natural | FF Global vs. Cobas Global PP | FF Global vs. Aberdeen Global Asian |
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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