Correlation Between Xtrackers LevDAX and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Lundin Mining 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 Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Lundin Mining, you can compare the effects of market volatilities on Xtrackers LevDAX and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Lundin Mining.
Diversification Opportunities for Xtrackers LevDAX and Lundin Mining
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Lundin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Lundin Mining go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Lundin Mining
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.01 times more return on investment than Lundin Mining. However, Xtrackers LevDAX is 1.01 times more volatile than Lundin Mining. It trades about 0.31 of its potential returns per unit of risk. Lundin Mining is currently generating about -0.03 per unit of risk. If you would invest 18,346 in Xtrackers LevDAX on September 13, 2024 and sell it today you would earn a total of 2,584 from holding Xtrackers LevDAX or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Lundin Mining
Performance |
| Timeline |
| Xtrackers LevDAX |
| Lundin Mining |
Xtrackers LevDAX and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Lundin Mining
The main advantage of trading using opposite Xtrackers LevDAX and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. iShares VII PLC |
| Lundin Mining vs. Southern Copper | Lundin Mining vs. Sandfire Resources Limited | Lundin Mining vs. Superior Plus Corp | Lundin Mining vs. NMI Holdings |
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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