Correlation Between Xtrackers LevDAX and Industria
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Industria 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 Industria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Industria de Diseno, you can compare the effects of market volatilities on Xtrackers LevDAX and Industria 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 Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Industria.
Diversification Opportunities for Xtrackers LevDAX and Industria
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Industria is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno 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 Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Industria go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Industria
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.1 times more return on investment than Industria. However, Xtrackers LevDAX is 1.1 times more volatile than Industria de Diseno. It trades about 0.09 of its potential returns per unit of risk. Industria de Diseno is currently generating about 0.09 per unit of risk. If you would invest 15,118 in Xtrackers LevDAX on September 14, 2024 and sell it today you would earn a total of 5,972 from holding Xtrackers LevDAX or generate 39.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Industria de Diseno
Performance |
| Timeline |
| Xtrackers LevDAX |
| Industria de Diseno |
Xtrackers LevDAX and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Industria
The main advantage of trading using opposite Xtrackers LevDAX and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria'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 |
| Industria vs. PUBLIC STORAGE PRFO | Industria vs. Datang International Power | Industria vs. CVS Health | Industria vs. Cass Information Systems |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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