Correlation Between Xtrackers ShortDAX and Global Fashion
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Global Fashion 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 Global Fashion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Global Fashion Group, you can compare the effects of market volatilities on Xtrackers ShortDAX and Global Fashion 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 Global Fashion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Global Fashion.
Diversification Opportunities for Xtrackers ShortDAX and Global Fashion
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Global is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Global Fashion Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fashion Group 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 Global Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fashion Group has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Global Fashion go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Global Fashion
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.41 times more return on investment than Global Fashion. However, Xtrackers ShortDAX is 2.43 times less risky than Global Fashion. It trades about 0.01 of its potential returns per unit of risk. Global Fashion Group is currently generating about -0.13 per unit of risk. If you would invest 85.00 in Xtrackers ShortDAX on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Xtrackers ShortDAX or generate 0.0% 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. Global Fashion Group
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Global Fashion Group |
Xtrackers ShortDAX and Global Fashion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Global Fashion
The main advantage of trading using opposite Xtrackers ShortDAX and Global Fashion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Global Fashion 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 Global Fashion will offset losses from the drop in Global Fashion'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 |
| Global Fashion vs. AGRICULTBK HADR25 YC | Global Fashion vs. Dairy Farm International | Global Fashion vs. GRIFFIN MINING LTD | Global Fashion vs. Sterling Construction |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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