Correlation Between Xtrackers LevDAX and PLAYTECH
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and PLAYTECH 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 PLAYTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and PLAYTECH, you can compare the effects of market volatilities on Xtrackers LevDAX and PLAYTECH 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 PLAYTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and PLAYTECH.
Diversification Opportunities for Xtrackers LevDAX and PLAYTECH
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and PLAYTECH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH 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 PLAYTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTECH has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and PLAYTECH go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and PLAYTECH
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the PLAYTECH. In addition to that, Xtrackers LevDAX is 2.9 times more volatile than PLAYTECH. It trades about -0.15 of its total potential returns per unit of risk. PLAYTECH is currently generating about -0.04 per unit of volatility. If you would invest 871.00 in PLAYTECH on August 27, 2024 and sell it today you would lose (5.00) from holding PLAYTECH or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xtrackers LevDAX vs. PLAYTECH
Performance |
| Timeline |
| Xtrackers LevDAX |
| PLAYTECH |
Xtrackers LevDAX and PLAYTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and PLAYTECH
The main advantage of trading using opposite Xtrackers LevDAX and PLAYTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, PLAYTECH 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 PLAYTECH will offset losses from the drop in PLAYTECH'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 |
| PLAYTECH vs. MTI WIRELESS EDGE | PLAYTECH vs. Ribbon Communications | PLAYTECH vs. Spirent Communications plc | PLAYTECH vs. Cleanaway Waste Management |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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