Correlation Between Xtrackers LevDAX and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and XLMedia PLC 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 XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and XLMedia PLC, you can compare the effects of market volatilities on Xtrackers LevDAX and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and XLMedia PLC.
Diversification Opportunities for Xtrackers LevDAX and XLMedia PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and XLMedia is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and XLMedia PLC go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and XLMedia PLC
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.15 times more return on investment than XLMedia PLC. However, Xtrackers LevDAX is 6.79 times less risky than XLMedia PLC. It trades about 0.32 of its potential returns per unit of risk. XLMedia PLC is currently generating about -0.01 per unit of risk. If you would invest 20,275 in Xtrackers LevDAX on November 3, 2024 and sell it today you would earn a total of 3,215 from holding Xtrackers LevDAX or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Xtrackers LevDAX vs. XLMedia PLC
Performance |
| Timeline |
| Xtrackers LevDAX |
| XLMedia PLC |
Xtrackers LevDAX and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and XLMedia PLC
The main advantage of trading using opposite Xtrackers LevDAX and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC'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 |
| XLMedia PLC vs. TROPHY GAMES DEV | XLMedia PLC vs. Scientific Games | XLMedia PLC vs. DETALION GAMES SA | XLMedia PLC vs. FIRST SHIP LEASE |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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