Correlation Between Xtrackers LevDAX and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Southern Copper 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 Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Southern Copper, you can compare the effects of market volatilities on Xtrackers LevDAX and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Southern Copper.
Diversification Opportunities for Xtrackers LevDAX and Southern Copper
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Southern is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Southern Copper go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Southern Copper
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.91 times more return on investment than Southern Copper. However, Xtrackers LevDAX is 1.1 times less risky than Southern Copper. It trades about 0.31 of its potential returns per unit of risk. Southern Copper is currently generating about 0.08 per unit of risk. If you would invest 18,346 in Xtrackers LevDAX on September 13, 2024 and sell it today you would earn a total of 2,584 from holding Xtrackers LevDAX or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Southern Copper
Performance |
| Timeline |
| Xtrackers LevDAX |
| Southern Copper |
Xtrackers LevDAX and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Southern Copper
The main advantage of trading using opposite Xtrackers LevDAX and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper'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 |
| Southern Copper vs. Sandfire Resources Limited | Southern Copper vs. Superior Plus Corp | Southern Copper vs. NMI Holdings | Southern Copper vs. SIVERS SEMICONDUCTORS AB |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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