Correlation Between Xtrackers ShortDAX and Lions Gate
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Lions Gate 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 Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Lions Gate Entertainment, you can compare the effects of market volatilities on Xtrackers ShortDAX and Lions Gate 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 Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Lions Gate.
Diversification Opportunities for Xtrackers ShortDAX and Lions Gate
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Lions is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Lions Gate Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lions Gate Entertainment 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 Lions Gate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lions Gate Entertainment has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Lions Gate go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Lions Gate
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 4.36 times less return on investment than Lions Gate. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.68 times less risky than Lions Gate. It trades about 0.04 of its potential returns per unit of risk. Lions Gate Entertainment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Lions Gate Entertainment on August 31, 2024 and sell it today you would earn a total of 75.00 from holding Lions Gate Entertainment or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Lions Gate Entertainment
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Lions Gate Entertainment |
Xtrackers ShortDAX and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Lions Gate
The main advantage of trading using opposite Xtrackers ShortDAX and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Lions Gate 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 Lions Gate will offset losses from the drop in Lions Gate'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 |
| Lions Gate vs. Live Nation Entertainment | Lions Gate vs. Fuji Media Holdings | Lions Gate vs. Rai Way SpA | Lions Gate vs. Superior Plus Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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