Correlation Between Xtrackers LevDAX and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Burlington Stores 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 Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Burlington Stores, you can compare the effects of market volatilities on Xtrackers LevDAX and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Burlington Stores.
Diversification Opportunities for Xtrackers LevDAX and Burlington Stores
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Burlington is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Burlington Stores go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Burlington Stores
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the Burlington Stores. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.42 times less risky than Burlington Stores. The etf trades about -0.15 of its potential returns per unit of risk. The Burlington Stores is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 23,400 in Burlington Stores on August 28, 2024 and sell it today you would earn a total of 3,800 from holding Burlington Stores or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Burlington Stores
Performance |
| Timeline |
| Xtrackers LevDAX |
| Burlington Stores |
Xtrackers LevDAX and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Burlington Stores
The main advantage of trading using opposite Xtrackers LevDAX and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
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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