Correlation Between Xtrackers LevDAX and BROADPEAK
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and BROADPEAK 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 BROADPEAK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and BROADPEAK SA EO, you can compare the effects of market volatilities on Xtrackers LevDAX and BROADPEAK 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 BROADPEAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and BROADPEAK.
Diversification Opportunities for Xtrackers LevDAX and BROADPEAK
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and BROADPEAK is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and BROADPEAK SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADPEAK SA EO 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 BROADPEAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADPEAK SA EO has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and BROADPEAK go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and BROADPEAK
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.19 times more return on investment than BROADPEAK. However, Xtrackers LevDAX is 1.19 times more volatile than BROADPEAK SA EO. It trades about 0.53 of its potential returns per unit of risk. BROADPEAK SA EO is currently generating about -0.05 per unit of risk. If you would invest 19,958 in Xtrackers LevDAX on October 30, 2024 and sell it today you would earn a total of 2,782 from holding Xtrackers LevDAX or generate 13.94% 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. BROADPEAK SA EO
Performance |
| Timeline |
| Xtrackers LevDAX |
| BROADPEAK SA EO |
Xtrackers LevDAX and BROADPEAK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and BROADPEAK
The main advantage of trading using opposite Xtrackers LevDAX and BROADPEAK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, BROADPEAK 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 BROADPEAK will offset losses from the drop in BROADPEAK'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 |
| BROADPEAK vs. CHIBA BANK | BROADPEAK vs. Virtu Financial | BROADPEAK vs. Fevertree Drinks PLC | BROADPEAK vs. Synchrony Financial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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