Correlation Between Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL H, you can compare the effects of market volatilities on Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL.
Diversification Opportunities for Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and DONGJIANG is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGJIANG ENVIRONMENTAL has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.33 times more return on investment than DONGJIANG ENVIRONMENTAL. However, Xtrackers LevDAX is 3.07 times less risky than DONGJIANG ENVIRONMENTAL. It trades about 0.08 of its potential returns per unit of risk. DONGJIANG ENVIRONMENTAL H is currently generating about 0.01 per unit of risk. If you would invest 13,576 in Xtrackers LevDAX on November 5, 2024 and sell it today you would earn a total of 9,914 from holding Xtrackers LevDAX or generate 73.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. DONGJIANG ENVIRONMENTAL H
Performance |
| Timeline |
| Xtrackers LevDAX |
| DONGJIANG ENVIRONMENTAL |
Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL
The main advantage of trading using opposite Xtrackers LevDAX and DONGJIANG ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL will offset losses from the drop in DONGJIANG ENVIRONMENTAL'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 |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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