Correlation Between Xtrackers ShortDAX and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Manulife Financial 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 Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Manulife Financial, you can compare the effects of market volatilities on Xtrackers ShortDAX and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Manulife Financial.
Diversification Opportunities for Xtrackers ShortDAX and Manulife Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Manulife is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Manulife Financial go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Manulife Financial
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Manulife Financial. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.01 times less risky than Manulife Financial. The etf trades about -0.06 of its potential returns per unit of risk. The Manulife Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,541 in Manulife Financial on September 12, 2024 and sell it today you would earn a total of 1,469 from holding Manulife Financial or generate 95.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Manulife Financial
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Manulife Financial |
Xtrackers ShortDAX and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Manulife Financial
The main advantage of trading using opposite Xtrackers ShortDAX and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Manulife Financial 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 Manulife Financial will offset losses from the drop in Manulife Financial'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 |
| Manulife Financial vs. Superior Plus Corp | Manulife Financial vs. SIVERS SEMICONDUCTORS AB | Manulife Financial vs. CHINA HUARONG ENERHD 50 | Manulife Financial vs. NORDIC HALIBUT AS |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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