Correlation Between Xtrackers LevDAX and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and PPG Industries 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 PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and PPG Industries, you can compare the effects of market volatilities on Xtrackers LevDAX and PPG Industries 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 PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and PPG Industries.
Diversification Opportunities for Xtrackers LevDAX and PPG Industries
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and PPG is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and PPG Industries go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and PPG Industries
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the PPG Industries. In addition to that, Xtrackers LevDAX is 1.34 times more volatile than PPG Industries. It trades about -0.01 of its total potential returns per unit of risk. PPG Industries is currently generating about 0.13 per unit of volatility. If you would invest 11,279 in PPG Industries on September 1, 2024 and sell it today you would earn a total of 376.00 from holding PPG Industries or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Xtrackers LevDAX vs. PPG Industries
Performance |
| Timeline |
| Xtrackers LevDAX |
| PPG Industries |
Xtrackers LevDAX and PPG Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and PPG Industries
The main advantage of trading using opposite Xtrackers LevDAX and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| PPG Industries vs. Haier Smart Home | PPG Industries vs. Charter Communications | PPG Industries vs. HomeToGo SE | PPG Industries vs. GALENA MINING LTD |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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