Correlation Between Xtrackers LevDAX and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Peninsula Energy 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Peninsula Energy Limited, you can compare the effects of market volatilities on Xtrackers LevDAX and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Peninsula Energy.
Diversification Opportunities for Xtrackers LevDAX and Peninsula Energy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Peninsula is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Peninsula Energy go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Peninsula Energy
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.18 times more return on investment than Peninsula Energy. However, Xtrackers LevDAX is 5.52 times less risky than Peninsula Energy. It trades about 0.59 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about 0.0 per unit of risk. If you would invest 20,495 in Xtrackers LevDAX on November 7, 2024 and sell it today you would earn a total of 2,995 from holding Xtrackers LevDAX or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.61% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Peninsula Energy Limited
Performance |
| Timeline |
| Xtrackers LevDAX |
| Peninsula Energy |
Xtrackers LevDAX and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Peninsula Energy
The main advantage of trading using opposite Xtrackers LevDAX and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy'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 |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Vale SA | Peninsula Energy vs. Vale SA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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