Correlation Between Xtrackers LevDAX and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Templeton Global 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 Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Templeton Global AD, you can compare the effects of market volatilities on Xtrackers LevDAX and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Templeton Global.
Diversification Opportunities for Xtrackers LevDAX and Templeton Global
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Templeton is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Templeton Global AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Templeton Global go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Templeton Global
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.42 times more return on investment than Templeton Global. However, Xtrackers LevDAX is 1.42 times more volatile than Templeton Global AD. It trades about 0.46 of its potential returns per unit of risk. Templeton Global AD is currently generating about 0.26 per unit of risk. If you would invest 19,946 in Xtrackers LevDAX on October 23, 2024 and sell it today you would earn a total of 1,984 from holding Xtrackers LevDAX or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Templeton Global AD
Performance |
| Timeline |
| Xtrackers LevDAX |
| Templeton Global |
Xtrackers LevDAX and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Templeton Global
The main advantage of trading using opposite Xtrackers LevDAX and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global'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 |
| Templeton Global vs. Azvalor Global Value | Templeton Global vs. JPM Global Natural | Templeton Global vs. Cobas Global PP | Templeton Global vs. JPMF Global Natural |
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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