Correlation Between Xtrackers ShortDAX and Yihai International
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Yihai International 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 Yihai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Yihai International Holding, you can compare the effects of market volatilities on Xtrackers ShortDAX and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Yihai International.
Diversification Opportunities for Xtrackers ShortDAX and Yihai International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Yihai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Yihai International go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Yihai International
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Yihai International. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 3.3 times less risky than Yihai International. The etf trades about -0.07 of its potential returns per unit of risk. The Yihai International Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Yihai International Holding on September 13, 2024 and sell it today you would earn a total of 66.00 from holding Yihai International Holding or generate 58.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Yihai International Holding
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Yihai International |
Xtrackers ShortDAX and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Yihai International
The main advantage of trading using opposite Xtrackers ShortDAX and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| Xtrackers ShortDAX vs. UBS Fund Solutions | Xtrackers ShortDAX vs. Xtrackers II | Xtrackers ShortDAX vs. Xtrackers Nikkei 225 | Xtrackers ShortDAX vs. iShares VII PLC |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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