Correlation Between Xtrackers ShortDAX and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Alibaba Health 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 Alibaba Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Alibaba Health Information, you can compare the effects of market volatilities on Xtrackers ShortDAX and Alibaba Health 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 Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Alibaba Health.
Diversification Opportunities for Xtrackers ShortDAX and Alibaba Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Alibaba is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor 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 Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Alibaba Health go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Alibaba Health
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Alibaba Health. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.02 times less risky than Alibaba Health. The etf trades about -0.2 of its potential returns per unit of risk. The Alibaba Health Information is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 47.00 in Alibaba Health Information on September 5, 2024 and sell it today you would lose (3.00) from holding Alibaba Health Information or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Alibaba Health Information
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Alibaba Health Infor |
Xtrackers ShortDAX and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Alibaba Health
The main advantage of trading using opposite Xtrackers ShortDAX and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Alibaba Health 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 Alibaba Health will offset losses from the drop in Alibaba Health'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 |
| Alibaba Health vs. Alibaba Health Information | Alibaba Health vs. Beijing Tong Ren | Alibaba Health vs. Oriola Oyj | Alibaba Health vs. Rite Aid |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |