Correlation Between Xtrackers ShortDAX and International Business
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and International Business Machines, you can compare the effects of market volatilities on Xtrackers ShortDAX and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and International Business.
Diversification Opportunities for Xtrackers ShortDAX and International Business
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and International is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and International Business go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and International Business
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the International Business. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.39 times less risky than International Business. The etf trades about -0.5 of its potential returns per unit of risk. The International Business Machines is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 19,610 in International Business Machines on September 19, 2024 and sell it today you would earn a total of 2,180 from holding International Business Machines or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. International Business Machine
Performance |
| Timeline |
| Xtrackers ShortDAX |
| International Business |
Xtrackers ShortDAX and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and International Business
The main advantage of trading using opposite Xtrackers ShortDAX and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| International Business vs. Ramsay Health Care | International Business vs. Carnegie Clean Energy | International Business vs. NAKED WINES PLC | International Business vs. Sabra Health Care |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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