Correlation Between Xtrackers ShortDAX and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and NTG Nordic Transport, you can compare the effects of market volatilities on Xtrackers ShortDAX and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and NTG Nordic.
Diversification Opportunities for Xtrackers ShortDAX and NTG Nordic
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and NTG is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and NTG Nordic go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and NTG Nordic
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the NTG Nordic. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.5 times less risky than NTG Nordic. The etf trades about -0.06 of its potential returns per unit of risk. The NTG Nordic Transport is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,820 in NTG Nordic Transport on August 24, 2024 and sell it today you would earn a total of 65.00 from holding NTG Nordic Transport or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. NTG Nordic Transport
Performance |
| Timeline |
| Xtrackers ShortDAX |
| NTG Nordic Transport |
Xtrackers ShortDAX and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and NTG Nordic
The main advantage of trading using opposite Xtrackers ShortDAX and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic'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 |
| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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