Correlation Between Xtrackers LevDAX and Cars
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Cars 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 Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Cars Inc, you can compare the effects of market volatilities on Xtrackers LevDAX and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Cars.
Diversification Opportunities for Xtrackers LevDAX and Cars
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Cars is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Cars go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Cars
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the Cars. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.79 times less risky than Cars. The etf trades about -0.07 of its potential returns per unit of risk. The Cars Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Cars Inc on August 28, 2024 and sell it today you would earn a total of 280.00 from holding Cars Inc or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Cars Inc
Performance |
| Timeline |
| Xtrackers LevDAX |
| Cars Inc |
Xtrackers LevDAX and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Cars
The main advantage of trading using opposite Xtrackers LevDAX and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Cars vs. Sterling Construction | Cars vs. North American Construction | Cars vs. Dairy Farm International | Cars vs. CHINA TONTINE WINES |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |