Correlation Between Xtrackers ShortDAX and S A P
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and S A P 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 S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and SAP SE, you can compare the effects of market volatilities on Xtrackers ShortDAX and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and S A P.
Diversification Opportunities for Xtrackers ShortDAX and S A P
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and SAP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and S A P go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and S A P
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the S A P. In addition to that, Xtrackers ShortDAX is 1.06 times more volatile than SAP SE. It trades about -0.06 of its total potential returns per unit of risk. SAP SE is currently generating about 0.13 per unit of volatility. If you would invest 14,267 in SAP SE on August 25, 2024 and sell it today you would earn a total of 8,348 from holding SAP SE or generate 58.51% 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. SAP SE
Performance |
| Timeline |
| Xtrackers ShortDAX |
| SAP SE |
Xtrackers ShortDAX and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and S A P
The main advantage of trading using opposite Xtrackers ShortDAX and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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