Correlation Between Xtrackers LevDAX and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and ITALIAN WINE 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 ITALIAN WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and ITALIAN WINE BRANDS, you can compare the effects of market volatilities on Xtrackers LevDAX and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and ITALIAN WINE.
Diversification Opportunities for Xtrackers LevDAX and ITALIAN WINE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and ITALIAN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and ITALIAN WINE go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and ITALIAN WINE
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the ITALIAN WINE. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.07 times less risky than ITALIAN WINE. The etf trades about -0.12 of its potential returns per unit of risk. The ITALIAN WINE BRANDS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,250 in ITALIAN WINE BRANDS on August 25, 2024 and sell it today you would lose (30.00) from holding ITALIAN WINE BRANDS or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers LevDAX vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| Xtrackers LevDAX |
| ITALIAN WINE BRANDS |
Xtrackers LevDAX and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and ITALIAN WINE
The main advantage of trading using opposite Xtrackers LevDAX and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE'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 |
| ITALIAN WINE vs. Diageo plc | ITALIAN WINE vs. NAKED WINES PLC | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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