Correlation Between Xtrackers ShortDAX and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Monster Beverage 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 Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Monster Beverage Corp, you can compare the effects of market volatilities on Xtrackers ShortDAX and Monster Beverage 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 Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Monster Beverage.
Diversification Opportunities for Xtrackers ShortDAX and Monster Beverage
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Monster is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp 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 Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Monster Beverage go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Monster Beverage
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Monster Beverage. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.08 times less risky than Monster Beverage. The etf trades about -0.04 of its potential returns per unit of risk. The Monster Beverage Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,216 in Monster Beverage Corp on August 28, 2024 and sell it today you would earn a total of 1,058 from holding Monster Beverage Corp or generate 25.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Monster Beverage Corp
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Monster Beverage Corp |
Xtrackers ShortDAX and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Monster Beverage
The main advantage of trading using opposite Xtrackers ShortDAX and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Monster Beverage 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 Monster Beverage will offset losses from the drop in Monster Beverage'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 |
| Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Apple Inc | Monster Beverage vs. Microsoft |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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