Correlation Between Xtrackers LevDAX and BP Prudhoe
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and BP Prudhoe 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 BP Prudhoe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and BP Prudhoe Bay, you can compare the effects of market volatilities on Xtrackers LevDAX and BP Prudhoe 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 BP Prudhoe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and BP Prudhoe.
Diversification Opportunities for Xtrackers LevDAX and BP Prudhoe
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and BMI is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and BP Prudhoe Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP Prudhoe Bay 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 BP Prudhoe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP Prudhoe Bay has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and BP Prudhoe go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and BP Prudhoe
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.24 times more return on investment than BP Prudhoe. However, Xtrackers LevDAX is 4.22 times less risky than BP Prudhoe. It trades about 0.01 of its potential returns per unit of risk. BP Prudhoe Bay is currently generating about -0.05 per unit of risk. If you would invest 18,464 in Xtrackers LevDAX on August 29, 2024 and sell it today you would lose (42.00) from holding Xtrackers LevDAX or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Xtrackers LevDAX vs. BP Prudhoe Bay
Performance |
| Timeline |
| Xtrackers LevDAX |
| BP Prudhoe Bay |
Xtrackers LevDAX and BP Prudhoe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and BP Prudhoe
The main advantage of trading using opposite Xtrackers LevDAX and BP Prudhoe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, BP Prudhoe 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 BP Prudhoe will offset losses from the drop in BP Prudhoe'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 |
| BP Prudhoe vs. REVO INSURANCE SPA | BP Prudhoe vs. Dalata Hotel Group | BP Prudhoe vs. Insurance Australia Group | BP Prudhoe vs. HANOVER INSURANCE |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |