Correlation Between Xtrackers LevDAX and MOAB MINERALS

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Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and MOAB MINERALS 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 MOAB MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and MOAB MINERALS LTD, you can compare the effects of market volatilities on Xtrackers LevDAX and MOAB MINERALS 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 MOAB MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and MOAB MINERALS.

Diversification Opportunities for Xtrackers LevDAX and MOAB MINERALS

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Xtrackers and MOAB is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and MOAB MINERALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOAB MINERALS LTD 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 MOAB MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOAB MINERALS LTD has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and MOAB MINERALS go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and MOAB MINERALS

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 49.17 times less return on investment than MOAB MINERALS. But when comparing it to its historical volatility, Xtrackers LevDAX is 34.41 times less risky than MOAB MINERALS. It trades about 0.08 of its potential returns per unit of risk. MOAB MINERALS LTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.30  in MOAB MINERALS LTD on September 24, 2024 and sell it today you would lose (0.25) from holding MOAB MINERALS LTD or give up 83.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Xtrackers LevDAX  vs.  MOAB MINERALS LTD

 Performance 
       Timeline  
Xtrackers LevDAX 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Xtrackers LevDAX may actually be approaching a critical reversion point that can send shares even higher in January 2025.
MOAB MINERALS LTD 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MOAB MINERALS LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOAB MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

Xtrackers LevDAX and MOAB MINERALS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtrackers LevDAX and MOAB MINERALS

The main advantage of trading using opposite Xtrackers LevDAX and MOAB MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, MOAB MINERALS 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 MOAB MINERALS will offset losses from the drop in MOAB MINERALS's long position.
The idea behind Xtrackers LevDAX and MOAB MINERALS LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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