Correlation Between Xtrackers LevDAX and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Addtech AB 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 Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Addtech AB, you can compare the effects of market volatilities on Xtrackers LevDAX and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Addtech AB.
Diversification Opportunities for Xtrackers LevDAX and Addtech AB
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and Addtech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Addtech AB go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Addtech AB
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.95 times more return on investment than Addtech AB. However, Xtrackers LevDAX is 1.05 times less risky than Addtech AB. It trades about 0.1 of its potential returns per unit of risk. Addtech AB is currently generating about 0.03 per unit of risk. If you would invest 19,464 in Xtrackers LevDAX on September 12, 2024 and sell it today you would earn a total of 1,466 from holding Xtrackers LevDAX or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Addtech AB
Performance |
| Timeline |
| Xtrackers LevDAX |
| Addtech AB |
Xtrackers LevDAX and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Addtech AB
The main advantage of trading using opposite Xtrackers LevDAX and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. iShares VII PLC |
| Addtech AB vs. Datadog | Addtech AB vs. TERADATA | Addtech AB vs. ITALIAN WINE BRANDS | Addtech AB vs. Zoom Video Communications |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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