Correlation Between Xtrackers LevDAX and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and LIFENET INSURANCE 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 LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and LIFENET INSURANCE CO, you can compare the effects of market volatilities on Xtrackers LevDAX and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and LIFENET INSURANCE.
Diversification Opportunities for Xtrackers LevDAX and LIFENET INSURANCE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and LIFENET is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and LIFENET INSURANCE
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 5.83 times less return on investment than LIFENET INSURANCE. But when comparing it to its historical volatility, Xtrackers LevDAX is 1.44 times less risky than LIFENET INSURANCE. It trades about 0.02 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,090 in LIFENET INSURANCE CO on August 28, 2024 and sell it today you would earn a total of 120.00 from holding LIFENET INSURANCE CO or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Xtrackers LevDAX vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Xtrackers LevDAX |
| LIFENET INSURANCE |
Xtrackers LevDAX and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and LIFENET INSURANCE
The main advantage of trading using opposite Xtrackers LevDAX and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE'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 |
| LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |