Correlation Between Xtrackers ShortDAX and SALMAR
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and SALMAR 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 SALMAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and SALMAR, you can compare the effects of market volatilities on Xtrackers ShortDAX and SALMAR 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 SALMAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and SALMAR.
Diversification Opportunities for Xtrackers ShortDAX and SALMAR
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and SALMAR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and SALMAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALMAR 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 SALMAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALMAR has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and SALMAR go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and SALMAR
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.88 times more return on investment than SALMAR. However, Xtrackers ShortDAX is 1.14 times less risky than SALMAR. It trades about 0.04 of its potential returns per unit of risk. SALMAR is currently generating about 0.02 per unit of risk. If you would invest 83.00 in Xtrackers ShortDAX on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Xtrackers ShortDAX or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. SALMAR
Performance |
| Timeline |
| Xtrackers ShortDAX |
| SALMAR |
Xtrackers ShortDAX and SALMAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and SALMAR
The main advantage of trading using opposite Xtrackers ShortDAX and SALMAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, SALMAR 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 SALMAR will offset losses from the drop in SALMAR'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 |
| SALMAR vs. TFS FINANCIAL | SALMAR vs. KB HOME | SALMAR vs. Tri Pointe Homes | SALMAR vs. The Hanover Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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