Correlation Between Xtrackers ShortDAX and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and SalMar ASA 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 ASA 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 ASA, you can compare the effects of market volatilities on Xtrackers ShortDAX and SalMar ASA 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 ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and SalMar ASA.
Diversification Opportunities for Xtrackers ShortDAX and SalMar ASA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and SalMar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and SalMar ASA go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and SalMar ASA
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 1.02 times less return on investment than SalMar ASA. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.25 times less risky than SalMar ASA. It trades about 0.08 of its potential returns per unit of risk. SalMar ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,920 in SalMar ASA on August 27, 2024 and sell it today you would earn a total of 115.00 from holding SalMar ASA or generate 2.34% 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 ASA
Performance |
| Timeline |
| Xtrackers ShortDAX |
| SalMar ASA |
Xtrackers ShortDAX and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and SalMar ASA
The main advantage of trading using opposite Xtrackers ShortDAX and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, SalMar ASA 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 ASA will offset losses from the drop in SalMar ASA'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 ASA vs. Mizuho Financial Group | SalMar ASA vs. Commonwealth Bank of | SalMar ASA vs. Webster Financial | SalMar ASA vs. OAKTRSPECLENDNEW |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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