Correlation Between Xtrackers ShortDAX and Kellogg
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Kellogg 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 Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Kellogg Company, you can compare the effects of market volatilities on Xtrackers ShortDAX and Kellogg 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 Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Kellogg.
Diversification Opportunities for Xtrackers ShortDAX and Kellogg
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Kellogg is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company 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 Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Kellogg go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Kellogg
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Kellogg. In addition to that, Xtrackers ShortDAX is 1.05 times more volatile than Kellogg Company. It trades about -0.04 of its total potential returns per unit of risk. Kellogg Company is currently generating about 0.04 per unit of volatility. If you would invest 5,872 in Kellogg Company on September 1, 2024 and sell it today you would earn a total of 1,762 from holding Kellogg Company or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Kellogg Company
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Kellogg Company |
Xtrackers ShortDAX and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Kellogg
The main advantage of trading using opposite Xtrackers ShortDAX and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg'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 |
| Kellogg vs. Strategic Education | Kellogg vs. IDP EDUCATION LTD | Kellogg vs. ACCSYS TECHPLC EO | Kellogg vs. Digilife Technologies Limited |
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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