Correlation Between Xtrackers LevDAX and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and REVO 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 REVO 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 REVO INSURANCE SPA, you can compare the effects of market volatilities on Xtrackers LevDAX and REVO 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and REVO INSURANCE.
Diversification Opportunities for Xtrackers LevDAX and REVO INSURANCE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and REVO is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and REVO INSURANCE go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and REVO INSURANCE
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the REVO INSURANCE. In addition to that, Xtrackers LevDAX is 1.16 times more volatile than REVO INSURANCE SPA. It trades about -0.09 of its total potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.17 per unit of volatility. If you would invest 998.00 in REVO INSURANCE SPA on August 24, 2024 and sell it today you would earn a total of 57.00 from holding REVO INSURANCE SPA or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers LevDAX vs. REVO INSURANCE SPA
Performance |
| Timeline |
| Xtrackers LevDAX |
| REVO INSURANCE SPA |
Xtrackers LevDAX and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and REVO INSURANCE
The main advantage of trading using opposite Xtrackers LevDAX and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, REVO 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 REVO INSURANCE will offset losses from the drop in REVO 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 |
| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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