Correlation Between Xtrackers LevDAX and Metro AG
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Metro AG 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 Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Metro AG, you can compare the effects of market volatilities on Xtrackers LevDAX and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Metro AG.
Diversification Opportunities for Xtrackers LevDAX and Metro AG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Metro is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Metro AG go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Metro AG
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.13 times more return on investment than Metro AG. However, Xtrackers LevDAX is 1.13 times more volatile than Metro AG. It trades about 0.27 of its potential returns per unit of risk. Metro AG is currently generating about -0.17 per unit of risk. If you would invest 18,660 in Xtrackers LevDAX on September 19, 2024 and sell it today you would earn a total of 2,265 from holding Xtrackers LevDAX or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Metro AG
Performance |
| Timeline |
| Xtrackers LevDAX |
| Metro AG |
Xtrackers LevDAX and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Metro AG
The main advantage of trading using opposite Xtrackers LevDAX and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG'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 |
| Metro AG vs. Metro AG | Metro AG vs. Superior Plus Corp | Metro AG vs. SIVERS SEMICONDUCTORS AB | Metro AG vs. NorAm Drilling AS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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