Correlation Between Xtrackers ShortDAX and Lyft
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Lyft 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 Lyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Lyft Inc, you can compare the effects of market volatilities on Xtrackers ShortDAX and Lyft 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 Lyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Lyft.
Diversification Opportunities for Xtrackers ShortDAX and Lyft
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Lyft is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Lyft Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyft Inc 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 Lyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyft Inc has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Lyft go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Lyft
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 19.07 times less return on investment than Lyft. But when comparing it to its historical volatility, Xtrackers ShortDAX is 3.97 times less risky than Lyft. It trades about 0.04 of its potential returns per unit of risk. Lyft Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,267 in Lyft Inc on August 30, 2024 and sell it today you would earn a total of 378.00 from holding Lyft Inc or generate 29.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Lyft Inc
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Lyft Inc |
Xtrackers ShortDAX and Lyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Lyft
The main advantage of trading using opposite Xtrackers ShortDAX and Lyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Lyft 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 Lyft will offset losses from the drop in Lyft'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 |
| Lyft vs. MGIC INVESTMENT | Lyft vs. SANOK RUBBER ZY | Lyft vs. Hyster Yale Materials Handling | Lyft vs. Virtus Investment Partners |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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