Correlation Between Xtrackers ShortDAX and China International
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and China International 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 China International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and China International Marine, you can compare the effects of market volatilities on Xtrackers ShortDAX and China International 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 China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and China International.
Diversification Opportunities for Xtrackers ShortDAX and China International
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and China is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and China International go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and China International
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.92 times more return on investment than China International. However, Xtrackers ShortDAX is 1.09 times less risky than China International. It trades about -0.1 of its potential returns per unit of risk. China International Marine is currently generating about -0.21 per unit of risk. If you would invest 85.00 in Xtrackers ShortDAX on September 2, 2024 and sell it today you would lose (3.00) from holding Xtrackers ShortDAX or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. China International Marine
Performance |
| Timeline |
| Xtrackers ShortDAX |
| China International |
Xtrackers ShortDAX and China International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and China International
The main advantage of trading using opposite Xtrackers ShortDAX and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, China International 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 China International will offset losses from the drop in China International'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 |
| China International vs. Sumitomo Chemical | China International vs. Silicon Motion Technology | China International vs. National Health Investors | China International vs. FEMALE HEALTH |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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