Correlation Between Xtrackers LevDAX and CVS Group
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and CVS Group 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 LevDAX and CVS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and CVS Group plc, you can compare the effects of market volatilities on Xtrackers LevDAX and CVS Group 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 CVS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and CVS Group.
Diversification Opportunities for Xtrackers LevDAX and CVS Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and CVS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and CVS Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Group plc 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 CVS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Group plc has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and CVS Group go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and CVS Group
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.67 times more return on investment than CVS Group. However, Xtrackers LevDAX is 1.5 times less risky than CVS Group. It trades about 0.2 of its potential returns per unit of risk. CVS Group plc is currently generating about 0.07 per unit of risk. If you would invest 19,106 in Xtrackers LevDAX on September 12, 2024 and sell it today you would earn a total of 1,824 from holding Xtrackers LevDAX or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. CVS Group plc
Performance |
| Timeline |
| Xtrackers LevDAX |
| CVS Group plc |
Xtrackers LevDAX and CVS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and CVS Group
The main advantage of trading using opposite Xtrackers LevDAX and CVS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, CVS Group 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 CVS Group will offset losses from the drop in CVS Group's long position.| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. iShares VII PLC |
| CVS Group vs. MGIC INVESTMENT | CVS Group vs. PLAYSTUDIOS A DL 0001 | CVS Group vs. Flutter Entertainment PLC | CVS Group vs. CNVISION MEDIA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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