Correlation Between Xtrackers LevDAX and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and AMADEUS IT 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 AMADEUS IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and AMADEUS IT GRP, you can compare the effects of market volatilities on Xtrackers LevDAX and AMADEUS IT 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 AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and AMADEUS IT.
Diversification Opportunities for Xtrackers LevDAX and AMADEUS IT
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and AMADEUS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and AMADEUS IT go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and AMADEUS IT
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the AMADEUS IT. In addition to that, Xtrackers LevDAX is 1.52 times more volatile than AMADEUS IT GRP. It trades about -0.15 of its total potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.01 per unit of volatility. If you would invest 6,700 in AMADEUS IT GRP on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AMADEUS IT GRP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Xtrackers LevDAX vs. AMADEUS IT GRP
Performance |
| Timeline |
| Xtrackers LevDAX |
| AMADEUS IT GRP |
Xtrackers LevDAX and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and AMADEUS IT
The main advantage of trading using opposite Xtrackers LevDAX and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT'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 |
| AMADEUS IT vs. USWE SPORTS AB | AMADEUS IT vs. BW OFFSHORE LTD | AMADEUS IT vs. SOLSTAD OFFSHORE NK | AMADEUS IT vs. Solstad Offshore ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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