Correlation Between Xtrackers LevDAX and BNP Paribas
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By analyzing existing cross correlation between Xtrackers LevDAX and BNP Paribas Midcap, you can compare the effects of market volatilities on Xtrackers LevDAX and BNP Paribas 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 LevDAX with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and BNP Paribas.
Diversification Opportunities for Xtrackers LevDAX and BNP Paribas
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtrackers and BNP is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and BNP Paribas Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Midcap and Xtrackers LevDAX 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 LevDAX are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas Midcap has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and BNP Paribas go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and BNP Paribas
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.8 times more return on investment than BNP Paribas. However, Xtrackers LevDAX is 1.8 times more volatile than BNP Paribas Midcap. It trades about 0.06 of its potential returns per unit of risk. BNP Paribas Midcap is currently generating about 0.01 per unit of risk. If you would invest 12,028 in Xtrackers LevDAX on September 3, 2024 and sell it today you would earn a total of 6,394 from holding Xtrackers LevDAX or generate 53.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. BNP Paribas Midcap
Performance |
| Timeline |
| Xtrackers LevDAX |
| BNP Paribas Midcap |
Xtrackers LevDAX and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and BNP Paribas
The main advantage of trading using opposite Xtrackers LevDAX and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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