Correlation Between Xtrackers ShortDAX and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Fresenius Medical 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 Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Fresenius Medical Care, you can compare the effects of market volatilities on Xtrackers ShortDAX and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Fresenius Medical.
Diversification Opportunities for Xtrackers ShortDAX and Fresenius Medical
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Fresenius is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Fresenius Medical go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Fresenius Medical
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.66 times more return on investment than Fresenius Medical. However, Xtrackers ShortDAX is 1.52 times less risky than Fresenius Medical. It trades about 0.08 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about -0.09 per unit of risk. If you would invest 76.00 in Xtrackers ShortDAX on October 12, 2024 and sell it today you would earn a total of 1.00 from holding Xtrackers ShortDAX or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Fresenius Medical Care
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Fresenius Medical Care |
Xtrackers ShortDAX and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Fresenius Medical
The main advantage of trading using opposite Xtrackers ShortDAX and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical'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 |
| Fresenius Medical vs. AM EAGLE OUTFITTERS | Fresenius Medical vs. Hemisphere Energy Corp | Fresenius Medical vs. Ribbon Communications | Fresenius Medical vs. GMO Internet |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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