Correlation Between Xtrackers LevDAX and Arthur J
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Arthur J 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 Arthur J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Arthur J Gallagher, you can compare the effects of market volatilities on Xtrackers LevDAX and Arthur J 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 Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Arthur J.
Diversification Opportunities for Xtrackers LevDAX and Arthur J
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Arthur is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher 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 Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Arthur J go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Arthur J
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the Arthur J. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.27 times less risky than Arthur J. The etf trades about -0.14 of its potential returns per unit of risk. The Arthur J Gallagher is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 26,830 in Arthur J Gallagher on October 12, 2024 and sell it today you would earn a total of 970.00 from holding Arthur J Gallagher or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Arthur J Gallagher
Performance |
| Timeline |
| Xtrackers LevDAX |
| Arthur J Gallagher |
Xtrackers LevDAX and Arthur J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Arthur J
The main advantage of trading using opposite Xtrackers LevDAX and Arthur J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Arthur J 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 Arthur J will offset losses from the drop in Arthur J'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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