Correlation Between Xtrackers ShortDAX and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Nabors Industries 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 Nabors Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Nabors Industries, you can compare the effects of market volatilities on Xtrackers ShortDAX and Nabors Industries 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 Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Nabors Industries.
Diversification Opportunities for Xtrackers ShortDAX and Nabors Industries
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Nabors is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries 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 Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Nabors Industries go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Nabors Industries
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Nabors Industries. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.98 times less risky than Nabors Industries. The etf trades about -0.07 of its potential returns per unit of risk. The Nabors Industries is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,800 in Nabors Industries on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Nabors Industries or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Nabors Industries
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Nabors Industries |
Xtrackers ShortDAX and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Nabors Industries
The main advantage of trading using opposite Xtrackers ShortDAX and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Nabors Industries 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 Nabors Industries will offset losses from the drop in Nabors Industries' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Nabors Industries vs. CarsalesCom | Nabors Industries vs. GEELY AUTOMOBILE | Nabors Industries vs. Datang International Power | Nabors Industries vs. Science Applications International |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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