Correlation Between Xtrackers ShortDAX and Walmart
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Walmart, you can compare the effects of market volatilities on Xtrackers ShortDAX and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Walmart.
Diversification Opportunities for Xtrackers ShortDAX and Walmart
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Walmart is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Walmart go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Walmart
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Walmart. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.02 times less risky than Walmart. The etf trades about -0.17 of its potential returns per unit of risk. The Walmart is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,488 in Walmart on September 24, 2024 and sell it today you would earn a total of 93.00 from holding Walmart or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Walmart
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Walmart |
Xtrackers ShortDAX and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Walmart
The main advantage of trading using opposite Xtrackers ShortDAX and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart'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 |
| Walmart vs. PLAYMATES TOYS | Walmart vs. Summit Materials | Walmart vs. Media and Games | Walmart vs. Applied Materials |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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