Correlation Between Xtrackers LevDAX and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and ASML HOLDING 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 ASML HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and ASML HOLDING NY, you can compare the effects of market volatilities on Xtrackers LevDAX and ASML HOLDING 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 ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and ASML HOLDING.
Diversification Opportunities for Xtrackers LevDAX and ASML HOLDING
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and ASML is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY 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 ASML HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML HOLDING NY has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and ASML HOLDING go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and ASML HOLDING
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the ASML HOLDING. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.12 times less risky than ASML HOLDING. The etf trades about -0.14 of its potential returns per unit of risk. The ASML HOLDING NY is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 65,436 in ASML HOLDING NY on August 29, 2024 and sell it today you would lose (1,236) from holding ASML HOLDING NY or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. ASML HOLDING NY
Performance |
| Timeline |
| Xtrackers LevDAX |
| ASML HOLDING NY |
Xtrackers LevDAX and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and ASML HOLDING
The main advantage of trading using opposite Xtrackers LevDAX and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, ASML HOLDING 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 ASML HOLDING will offset losses from the drop in ASML HOLDING'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 |
| ASML HOLDING vs. Superior Plus Corp | ASML HOLDING vs. NMI Holdings | ASML HOLDING vs. Origin Agritech | ASML HOLDING vs. SIVERS SEMICONDUCTORS AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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