Correlation Between Xtrackers ShortDAX and Terex
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Terex 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 Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Terex, you can compare the effects of market volatilities on Xtrackers ShortDAX and Terex 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 Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Terex.
Diversification Opportunities for Xtrackers ShortDAX and Terex
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Terex is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex 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 Terex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terex has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Terex go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Terex
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Terex. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.6 times less risky than Terex. The etf trades about -0.07 of its potential returns per unit of risk. The Terex is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,687 in Terex on September 1, 2024 and sell it today you would earn a total of 457.00 from holding Terex or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Terex
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Terex |
Xtrackers ShortDAX and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Terex
The main advantage of trading using opposite Xtrackers ShortDAX and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Terex 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 Terex will offset losses from the drop in Terex'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 |
| Terex vs. SHIN ETSU CHEMICAL | Terex vs. ADRIATIC METALS LS 013355 | Terex vs. SERI INDUSTRIAL EO | Terex vs. AIR PRODCHEMICALS |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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