Correlation Between Xtrackers LevDAX and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Silvercorp Metals 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 Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Silvercorp Metals, you can compare the effects of market volatilities on Xtrackers LevDAX and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Silvercorp Metals.
Diversification Opportunities for Xtrackers LevDAX and Silvercorp Metals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Silvercorp is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Silvercorp Metals
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.51 times more return on investment than Silvercorp Metals. However, Xtrackers LevDAX is 1.97 times less risky than Silvercorp Metals. It trades about 0.1 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.25 per unit of risk. If you would invest 19,258 in Xtrackers LevDAX on September 22, 2024 and sell it today you would earn a total of 1,472 from holding Xtrackers LevDAX or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Silvercorp Metals
Performance |
| Timeline |
| Xtrackers LevDAX |
| Silvercorp Metals |
Xtrackers LevDAX and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Silvercorp Metals
The main advantage of trading using opposite Xtrackers LevDAX and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Silvercorp Metals vs. Ares Management Corp | Silvercorp Metals vs. ALTAIR RES INC | Silvercorp Metals vs. Brockhaus Capital Management | Silvercorp Metals vs. Air New Zealand |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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