Correlation Between Xtrackers LevDAX and SAF Holland
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and SAF Holland 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 SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and SAF Holland SA, you can compare the effects of market volatilities on Xtrackers LevDAX and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and SAF Holland.
Diversification Opportunities for Xtrackers LevDAX and SAF Holland
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and SAF is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and SAF Holland go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and SAF Holland
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.85 times more return on investment than SAF Holland. However, Xtrackers LevDAX is 1.18 times less risky than SAF Holland. It trades about 0.2 of its potential returns per unit of risk. SAF Holland SA is currently generating about 0.01 per unit of risk. If you would invest 19,106 in Xtrackers LevDAX on September 12, 2024 and sell it today you would earn a total of 1,824 from holding Xtrackers LevDAX or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers LevDAX vs. SAF Holland SA
Performance |
| Timeline |
| Xtrackers LevDAX |
| SAF Holland SA |
Xtrackers LevDAX and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and SAF Holland
The main advantage of trading using opposite Xtrackers LevDAX and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland's long position.| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. iShares VII PLC |
| SAF Holland vs. SALESFORCE INC CDR | SAF Holland vs. Carsales | SAF Holland vs. Dairy Farm International | SAF Holland vs. CANON MARKETING JP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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