Correlation Between Xtrackers ShortDAX and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Gerresheimer 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 Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Gerresheimer AG, you can compare the effects of market volatilities on Xtrackers ShortDAX and Gerresheimer 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 Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Gerresheimer.
Diversification Opportunities for Xtrackers ShortDAX and Gerresheimer
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Gerresheimer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG 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 Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Gerresheimer go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Gerresheimer
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.78 times more return on investment than Gerresheimer. However, Xtrackers ShortDAX is 1.28 times less risky than Gerresheimer. It trades about -0.1 of its potential returns per unit of risk. Gerresheimer AG is currently generating about -0.11 per unit of risk. If you would invest 85.00 in Xtrackers ShortDAX on September 2, 2024 and sell it today you would lose (3.00) from holding Xtrackers ShortDAX or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Gerresheimer AG
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Gerresheimer AG |
Xtrackers ShortDAX and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Gerresheimer
The main advantage of trading using opposite Xtrackers ShortDAX and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer'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 |
| Gerresheimer vs. ESSILORLUXOTTICA 12ON | Gerresheimer vs. Intuitive Surgical | Gerresheimer vs. EssilorLuxottica Socit anonyme | Gerresheimer vs. HOYA Corporation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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