Correlation Between Xtrackers LevDAX and LG DAX
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and LG DAX 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 LG DAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and LG DAX Daily, you can compare the effects of market volatilities on Xtrackers LevDAX and LG DAX 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 LG DAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and LG DAX.
Diversification Opportunities for Xtrackers LevDAX and LG DAX
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and DES2 is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and LG DAX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG DAX Daily 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 LG DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG DAX Daily has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and LG DAX go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and LG DAX
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the LG DAX. In addition to that, Xtrackers LevDAX is 1.1 times more volatile than LG DAX Daily. It trades about -0.15 of its total potential returns per unit of risk. LG DAX Daily is currently generating about 0.1 per unit of volatility. If you would invest 97.00 in LG DAX Daily on August 27, 2024 and sell it today you would earn a total of 3.00 from holding LG DAX Daily or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xtrackers LevDAX vs. LG DAX Daily
Performance |
| Timeline |
| Xtrackers LevDAX |
| LG DAX Daily |
Xtrackers LevDAX and LG DAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and LG DAX
The main advantage of trading using opposite Xtrackers LevDAX and LG DAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, LG DAX 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 LG DAX will offset losses from the drop in LG DAX'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 |
| LG DAX vs. LG DAX Daily | LG DAX vs. iShares Govt Bond | LG DAX vs. Amundi MSCI Europe | LG DAX vs. iShares Global AAA AA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |