Correlation Between Xtrackers ShortDAX and REGIONS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and REGIONS FINANCIAL 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 REGIONS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and REGIONS FINANCIAL PFD, you can compare the effects of market volatilities on Xtrackers ShortDAX and REGIONS FINANCIAL 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 REGIONS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and REGIONS FINANCIAL.
Diversification Opportunities for Xtrackers ShortDAX and REGIONS FINANCIAL
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and REGIONS is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and REGIONS FINANCIAL PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGIONS FINANCIAL PFD 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 REGIONS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGIONS FINANCIAL PFD has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and REGIONS FINANCIAL go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and REGIONS FINANCIAL
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the REGIONS FINANCIAL. In addition to that, Xtrackers ShortDAX is 1.47 times more volatile than REGIONS FINANCIAL PFD. It trades about -0.03 of its total potential returns per unit of risk. REGIONS FINANCIAL PFD is currently generating about 0.07 per unit of volatility. If you would invest 1,575 in REGIONS FINANCIAL PFD on September 1, 2024 and sell it today you would earn a total of 245.00 from holding REGIONS FINANCIAL PFD or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. REGIONS FINANCIAL PFD
Performance |
| Timeline |
| Xtrackers ShortDAX |
| REGIONS FINANCIAL PFD |
Xtrackers ShortDAX and REGIONS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and REGIONS FINANCIAL
The main advantage of trading using opposite Xtrackers ShortDAX and REGIONS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, REGIONS FINANCIAL 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 REGIONS FINANCIAL will offset losses from the drop in REGIONS FINANCIAL'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 |
| REGIONS FINANCIAL vs. INDOFOOD AGRI RES | REGIONS FINANCIAL vs. JJ SNACK FOODS | REGIONS FINANCIAL vs. SENECA FOODS A | REGIONS FINANCIAL vs. Universal Display |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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