Correlation Between Xtrackers ShortDAX and Rock Tech
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Rock Tech 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 Rock Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Rock Tech Lithium, you can compare the effects of market volatilities on Xtrackers ShortDAX and Rock Tech 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 Rock Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Rock Tech.
Diversification Opportunities for Xtrackers ShortDAX and Rock Tech
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Rock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Rock Tech Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rock Tech Lithium 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 Rock Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rock Tech Lithium has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Rock Tech go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Rock Tech
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Rock Tech. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 3.01 times less risky than Rock Tech. The etf trades about -0.05 of its potential returns per unit of risk. The Rock Tech Lithium is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Rock Tech Lithium on September 3, 2024 and sell it today you would lose (113.00) from holding Rock Tech Lithium or give up 61.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Rock Tech Lithium
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Rock Tech Lithium |
Xtrackers ShortDAX and Rock Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Rock Tech
The main advantage of trading using opposite Xtrackers ShortDAX and Rock Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Rock Tech 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 Rock Tech will offset losses from the drop in Rock Tech'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 |
| Rock Tech vs. Mineral Resources Limited | Rock Tech vs. Liontown Resources Limited | Rock Tech vs. American Lithium Corp | Rock Tech vs. ADRIATIC METALS LS 013355 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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