Correlation Between Xtrackers ShortDAX and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and ENN Energy 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 ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and ENN Energy Holdings, you can compare the effects of market volatilities on Xtrackers ShortDAX and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and ENN Energy.
Diversification Opportunities for Xtrackers ShortDAX and ENN Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and ENN is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and ENN Energy go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and ENN Energy
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the ENN Energy. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.48 times less risky than ENN Energy. The etf trades about -0.06 of its potential returns per unit of risk. The ENN Energy Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 629.00 in ENN Energy Holdings on September 2, 2024 and sell it today you would lose (19.00) from holding ENN Energy Holdings or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. ENN Energy Holdings
Performance |
| Timeline |
| Xtrackers ShortDAX |
| ENN Energy Holdings |
Xtrackers ShortDAX and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and ENN Energy
The main advantage of trading using opposite Xtrackers ShortDAX and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy'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 |
| ENN Energy vs. CenterPoint Energy | ENN Energy vs. Snam SpA | ENN Energy vs. Superior Plus Corp | ENN Energy vs. NMI Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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