Correlation Between Xtrackers LevDAX and Gentex
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Gentex 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 Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Gentex, you can compare the effects of market volatilities on Xtrackers LevDAX and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Gentex.
Diversification Opportunities for Xtrackers LevDAX and Gentex
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Gentex is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Gentex go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Gentex
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.13 times more return on investment than Gentex. However, Xtrackers LevDAX is 1.13 times more volatile than Gentex. It trades about 0.08 of its potential returns per unit of risk. Gentex 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Gentex
Performance |
| Timeline |
| Xtrackers LevDAX |
| Gentex |
Xtrackers LevDAX and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Gentex
The main advantage of trading using opposite Xtrackers LevDAX and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex'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 |
| Gentex vs. Cairo Communication SpA | Gentex vs. Penn National Gaming | Gentex vs. TELECOM ITALIA | Gentex vs. GAMING FAC SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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