Correlation Between Xtrackers ShortDAX and LAM RESEARCH
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and LAM RESEARCH 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 LAM RESEARCH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and LAM RESEARCH P, you can compare the effects of market volatilities on Xtrackers ShortDAX and LAM RESEARCH 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 LAM RESEARCH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and LAM RESEARCH.
Diversification Opportunities for Xtrackers ShortDAX and LAM RESEARCH
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and LAM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and LAM RESEARCH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAM RESEARCH P 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 LAM RESEARCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAM RESEARCH P has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and LAM RESEARCH go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and LAM RESEARCH
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the LAM RESEARCH. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.82 times less risky than LAM RESEARCH. The etf trades about -0.3 of its potential returns per unit of risk. The LAM RESEARCH P is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,139 in LAM RESEARCH P on September 12, 2024 and sell it today you would earn a total of 269.00 from holding LAM RESEARCH P or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. LAM RESEARCH P
Performance |
| Timeline |
| Xtrackers ShortDAX |
| LAM RESEARCH P |
Xtrackers ShortDAX and LAM RESEARCH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and LAM RESEARCH
The main advantage of trading using opposite Xtrackers ShortDAX and LAM RESEARCH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, LAM RESEARCH 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 LAM RESEARCH will offset losses from the drop in LAM RESEARCH'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 |
| LAM RESEARCH vs. Apple Inc | LAM RESEARCH vs. Apple Inc | LAM RESEARCH vs. Apple Inc | LAM RESEARCH vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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