Correlation Between Xtrackers LevDAX and Sony Group
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Sony Group 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 Sony Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Sony Group Corp, you can compare the effects of market volatilities on Xtrackers LevDAX and Sony Group 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 Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Sony Group.
Diversification Opportunities for Xtrackers LevDAX and Sony Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Sony is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Sony Group go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Sony Group
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 6.69 times less return on investment than Sony Group. But when comparing it to its historical volatility, Xtrackers LevDAX is 5.24 times less risky than Sony Group. It trades about 0.05 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Sony Group Corp on August 27, 2024 and sell it today you would earn a total of 1,464 from holding Sony Group Corp or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Sony Group Corp
Performance |
| Timeline |
| Xtrackers LevDAX |
| Sony Group Corp |
Xtrackers LevDAX and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Sony Group
The main advantage of trading using opposite Xtrackers LevDAX and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Sony Group 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 Sony Group will offset losses from the drop in Sony Group'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 |
| Sony Group vs. CHINA EDUCATION GROUP | Sony Group vs. IDP EDUCATION LTD | Sony Group vs. G8 EDUCATION | Sony Group vs. SEI INVESTMENTS |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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