Correlation Between Xtrackers ShortDAX and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Teck Resources 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 Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Teck Resources Ltd, you can compare the effects of market volatilities on Xtrackers ShortDAX and Teck Resources 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 Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Teck Resources.
Diversification Opportunities for Xtrackers ShortDAX and Teck Resources
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Teck is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Teck Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources 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 Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Teck Resources go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Teck Resources
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Teck Resources. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.52 times less risky than Teck Resources. The etf trades about -0.1 of its potential returns per unit of risk. The Teck Resources Ltd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,260 in Teck Resources Ltd on September 2, 2024 and sell it today you would earn a total of 172.00 from holding Teck Resources Ltd or generate 4.04% 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. Teck Resources Ltd
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Teck Resources |
Xtrackers ShortDAX and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Teck Resources
The main advantage of trading using opposite Xtrackers ShortDAX and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Teck Resources vs. BHP Group Limited | Teck Resources vs. Rio Tinto Group | Teck Resources vs. Vale SA | Teck Resources vs. Vale SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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