Correlation Between Xtrackers LevDAX and Nisshin Seifun
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Nisshin Seifun 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 Nisshin Seifun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Nisshin Seifun Group, you can compare the effects of market volatilities on Xtrackers LevDAX and Nisshin Seifun 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 Nisshin Seifun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Nisshin Seifun.
Diversification Opportunities for Xtrackers LevDAX and Nisshin Seifun
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Nisshin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Nisshin Seifun Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshin Seifun Group 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 Nisshin Seifun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshin Seifun Group has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Nisshin Seifun go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Nisshin Seifun
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.88 times more return on investment than Nisshin Seifun. However, Xtrackers LevDAX is 1.14 times less risky than Nisshin Seifun. It trades about 0.09 of its potential returns per unit of risk. Nisshin Seifun Group is currently generating about 0.0 per unit of risk. If you would invest 13,392 in Xtrackers LevDAX on September 12, 2024 and sell it today you would earn a total of 7,538 from holding Xtrackers LevDAX or generate 56.29% 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. Nisshin Seifun Group
Performance |
| Timeline |
| Xtrackers LevDAX |
| Nisshin Seifun Group |
Xtrackers LevDAX and Nisshin Seifun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Nisshin Seifun
The main advantage of trading using opposite Xtrackers LevDAX and Nisshin Seifun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Nisshin Seifun 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 Nisshin Seifun will offset losses from the drop in Nisshin Seifun'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 |
| Nisshin Seifun vs. Hormel Foods | Nisshin Seifun vs. Superior Plus Corp | Nisshin Seifun vs. SIVERS SEMICONDUCTORS AB | Nisshin Seifun vs. NorAm Drilling AS |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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