Correlation Between Xtrackers ShortDAX and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Tanger Factory 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 Tanger Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Tanger Factory Outlet, you can compare the effects of market volatilities on Xtrackers ShortDAX and Tanger Factory 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 Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Tanger Factory.
Diversification Opportunities for Xtrackers ShortDAX and Tanger Factory
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Tanger is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet 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 Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Tanger Factory go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Tanger Factory
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Tanger Factory. In addition to that, Xtrackers ShortDAX is 1.13 times more volatile than Tanger Factory Outlet. It trades about -0.02 of its total potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.18 per unit of volatility. If you would invest 2,469 in Tanger Factory Outlet on September 1, 2024 and sell it today you would earn a total of 1,014 from holding Tanger Factory Outlet or generate 41.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Tanger Factory Outlet
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Tanger Factory Outlet |
Xtrackers ShortDAX and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Tanger Factory
The main advantage of trading using opposite Xtrackers ShortDAX and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory'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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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