Correlation Between Xtrackers LevDAX and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and REGAL HOTEL 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 REGAL HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and REGAL HOTEL INTL, you can compare the effects of market volatilities on Xtrackers LevDAX and REGAL HOTEL 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 REGAL HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and REGAL HOTEL.
Diversification Opportunities for Xtrackers LevDAX and REGAL HOTEL
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and REGAL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 REGAL HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and REGAL HOTEL go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and REGAL HOTEL
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.58 times more return on investment than REGAL HOTEL. However, Xtrackers LevDAX is 1.73 times less risky than REGAL HOTEL. It trades about 0.6 of its potential returns per unit of risk. REGAL HOTEL INTL is currently generating about 0.08 per unit of risk. If you would invest 19,944 in Xtrackers LevDAX on November 4, 2024 and sell it today you would earn a total of 3,546 from holding Xtrackers LevDAX or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers LevDAX vs. REGAL HOTEL INTL
Performance |
| Timeline |
| Xtrackers LevDAX |
| REGAL HOTEL INTL |
Xtrackers LevDAX and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and REGAL HOTEL
The main advantage of trading using opposite Xtrackers LevDAX and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, REGAL HOTEL 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 REGAL HOTEL will offset losses from the drop in REGAL HOTEL'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 |
| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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