Correlation Between Xtrackers LevDAX and Expat Poland
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Expat Poland 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 Expat Poland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Expat Poland WIG20, you can compare the effects of market volatilities on Xtrackers LevDAX and Expat Poland 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 Expat Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Expat Poland.
Diversification Opportunities for Xtrackers LevDAX and Expat Poland
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Expat is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Expat Poland WIG20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Poland WIG20 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 Expat Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Poland WIG20 has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Expat Poland go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Expat Poland
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.59 times more return on investment than Expat Poland. However, Xtrackers LevDAX is 1.69 times less risky than Expat Poland. It trades about 0.17 of its potential returns per unit of risk. Expat Poland WIG20 is currently generating about 0.02 per unit of risk. If you would invest 19,468 in Xtrackers LevDAX on October 26, 2024 and sell it today you would earn a total of 3,642 from holding Xtrackers LevDAX or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Expat Poland WIG20
Performance |
| Timeline |
| Xtrackers LevDAX |
| Expat Poland WIG20 |
Xtrackers LevDAX and Expat Poland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Expat Poland
The main advantage of trading using opposite Xtrackers LevDAX and Expat Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Expat Poland 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 Expat Poland will offset losses from the drop in Expat Poland'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 |
| Expat Poland vs. Expat Czech PX | Expat Poland vs. Expat Croatia Crobex | Expat Poland vs. Expat Serbia Belex15 | Expat Poland vs. Expat Slovenia SBI |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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