Correlation Between Xtrackers LevDAX and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and SBI Insurance 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 SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and SBI Insurance Group, you can compare the effects of market volatilities on Xtrackers LevDAX and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and SBI Insurance.
Diversification Opportunities for Xtrackers LevDAX and SBI Insurance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and SBI is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and SBI Insurance go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and SBI Insurance
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the SBI Insurance. In addition to that, Xtrackers LevDAX is 1.2 times more volatile than SBI Insurance Group. It trades about -0.15 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.3 per unit of volatility. If you would invest 545.00 in SBI Insurance Group on August 28, 2024 and sell it today you would earn a total of 50.00 from holding SBI Insurance Group or generate 9.17% 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. SBI Insurance Group
Performance |
| Timeline |
| Xtrackers LevDAX |
| SBI Insurance Group |
Xtrackers LevDAX and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and SBI Insurance
The main advantage of trading using opposite Xtrackers LevDAX and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance'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 |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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