Correlation Between Xtrackers ShortDAX and New HopeLimited
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and New HopeLimited 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 New HopeLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and New Hope, you can compare the effects of market volatilities on Xtrackers ShortDAX and New HopeLimited 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 New HopeLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and New HopeLimited.
Diversification Opportunities for Xtrackers ShortDAX and New HopeLimited
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and New is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New HopeLimited 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 New HopeLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New HopeLimited has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and New HopeLimited go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and New HopeLimited
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the New HopeLimited. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.0 times less risky than New HopeLimited. The etf trades about -0.14 of its potential returns per unit of risk. The New Hope is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 291.00 in New Hope on September 3, 2024 and sell it today you would lose (4.00) from holding New Hope or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. New Hope
Performance |
| Timeline |
| Xtrackers ShortDAX |
| New HopeLimited |
Xtrackers ShortDAX and New HopeLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and New HopeLimited
The main advantage of trading using opposite Xtrackers ShortDAX and New HopeLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, New HopeLimited 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 New HopeLimited will offset losses from the drop in New HopeLimited'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 |
| New HopeLimited vs. China Shenhua Energy | New HopeLimited vs. PT Bayan Resources | New HopeLimited vs. Yanzhou Coal Mining | New HopeLimited vs. Yanzhou Coal Mining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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