Correlation Between Xtrackers ShortDAX and Waste Management
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Waste Management 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 Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Waste Management, you can compare the effects of market volatilities on Xtrackers ShortDAX and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Waste Management.
Diversification Opportunities for Xtrackers ShortDAX and Waste Management
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Waste is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Waste Management go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Waste Management
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Waste Management. In addition to that, Xtrackers ShortDAX is 1.17 times more volatile than Waste Management. It trades about -0.3 of its total potential returns per unit of risk. Waste Management is currently generating about 0.2 per unit of volatility. If you would invest 20,520 in Waste Management on November 18, 2024 and sell it today you would earn a total of 1,185 from holding Waste Management or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Waste Management
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Waste Management |
Xtrackers ShortDAX and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Waste Management
The main advantage of trading using opposite Xtrackers ShortDAX and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management'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 |
| Waste Management vs. INTERCONT HOTELS | Waste Management vs. Pebblebrook Hotel Trust | Waste Management vs. NH HOTEL GROUP | Waste Management vs. Perseus Mining Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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