Correlation Between Xtrackers LevDAX and CN LGYPWRGRUNSPADR1
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and CN LGYPWRGRUNSPADR1 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 CN LGYPWRGRUNSPADR1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and CN LGYPWRGRUNSPADR10, you can compare the effects of market volatilities on Xtrackers LevDAX and CN LGYPWRGRUNSPADR1 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 CN LGYPWRGRUNSPADR1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and CN LGYPWRGRUNSPADR1.
Diversification Opportunities for Xtrackers LevDAX and CN LGYPWRGRUNSPADR1
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and 6WX0 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and CN LGYPWRGRUNSPADR10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN LGYPWRGRUNSPADR10 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 CN LGYPWRGRUNSPADR1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN LGYPWRGRUNSPADR10 has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and CN LGYPWRGRUNSPADR1 go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and CN LGYPWRGRUNSPADR1
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.52 times less return on investment than CN LGYPWRGRUNSPADR1. But when comparing it to its historical volatility, Xtrackers LevDAX is 2.2 times less risky than CN LGYPWRGRUNSPADR1. It trades about 0.06 of its potential returns per unit of risk. CN LGYPWRGRUNSPADR10 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 567.00 in CN LGYPWRGRUNSPADR10 on September 4, 2024 and sell it today you would earn a total of 133.00 from holding CN LGYPWRGRUNSPADR10 or generate 23.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Xtrackers LevDAX vs. CN LGYPWRGRUNSPADR10
Performance |
| Timeline |
| Xtrackers LevDAX |
| CN LGYPWRGRUNSPADR10 |
Xtrackers LevDAX and CN LGYPWRGRUNSPADR1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and CN LGYPWRGRUNSPADR1
The main advantage of trading using opposite Xtrackers LevDAX and CN LGYPWRGRUNSPADR1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, CN LGYPWRGRUNSPADR1 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 CN LGYPWRGRUNSPADR1 will offset losses from the drop in CN LGYPWRGRUNSPADR1's long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| CN LGYPWRGRUNSPADR1 vs. PNE AG | CN LGYPWRGRUNSPADR1 vs. Lyxor 1 | CN LGYPWRGRUNSPADR1 vs. Xtrackers ShortDAX | CN LGYPWRGRUNSPADR1 vs. Xtrackers LevDAX |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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