Correlation Between Xtrackers LevDAX and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Beazer Homes 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 Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Beazer Homes USA, you can compare the effects of market volatilities on Xtrackers LevDAX and Beazer Homes 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 Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Beazer Homes.
Diversification Opportunities for Xtrackers LevDAX and Beazer Homes
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Beazer is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Beazer Homes USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazer Homes USA 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 Beazer Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazer Homes USA has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Beazer Homes go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Beazer Homes
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.34 times more return on investment than Beazer Homes. However, Xtrackers LevDAX is 2.97 times less risky than Beazer Homes. It trades about 0.6 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.02 per unit of risk. If you would invest 20,015 in Xtrackers LevDAX on November 3, 2024 and sell it today you would earn a total of 3,475 from holding Xtrackers LevDAX or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Beazer Homes USA
Performance |
| Timeline |
| Xtrackers LevDAX |
| Beazer Homes USA |
Xtrackers LevDAX and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Beazer Homes
The main advantage of trading using opposite Xtrackers LevDAX and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Beazer Homes 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 Beazer Homes will offset losses from the drop in Beazer Homes' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Beazer Homes vs. CarsalesCom | Beazer Homes vs. Fast Retailing Co | Beazer Homes vs. Canon Marketing Japan | Beazer Homes vs. ZhongAn Online P |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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