Correlation Between Xtrackers LevDAX and AB Volvo
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and AB Volvo 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 AB Volvo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and AB Volvo, you can compare the effects of market volatilities on Xtrackers LevDAX and AB Volvo 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 AB Volvo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and AB Volvo.
Diversification Opportunities for Xtrackers LevDAX and AB Volvo
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and VOL3 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and AB Volvo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Volvo 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 AB Volvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Volvo has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and AB Volvo go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and AB Volvo
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the AB Volvo. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.01 times less risky than AB Volvo. The etf trades about -0.03 of its potential returns per unit of risk. The AB Volvo is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,396 in AB Volvo on September 3, 2024 and sell it today you would lose (28.00) from holding AB Volvo or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xtrackers LevDAX vs. AB Volvo
Performance |
| Timeline |
| Xtrackers LevDAX |
| AB Volvo |
Xtrackers LevDAX and AB Volvo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and AB Volvo
The main advantage of trading using opposite Xtrackers LevDAX and AB Volvo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, AB Volvo 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 AB Volvo will offset losses from the drop in AB Volvo'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 |
| AB Volvo vs. Hyster Yale Materials Handling | AB Volvo vs. Superior Plus Corp | AB Volvo vs. NMI Holdings | AB Volvo vs. Origin Agritech |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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