Correlation Between Xtrackers LevDAX and GELSENWASSER
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and GELSENWASSER 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 GELSENWASSER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and GELSENWASSER, you can compare the effects of market volatilities on Xtrackers LevDAX and GELSENWASSER 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 GELSENWASSER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and GELSENWASSER.
Diversification Opportunities for Xtrackers LevDAX and GELSENWASSER
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and GELSENWASSER is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and GELSENWASSER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GELSENWASSER 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 GELSENWASSER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GELSENWASSER has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and GELSENWASSER go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and GELSENWASSER
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the GELSENWASSER. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.25 times less risky than GELSENWASSER. The etf trades about -0.06 of its potential returns per unit of risk. The GELSENWASSER is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 51,000 in GELSENWASSER on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding GELSENWASSER or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers LevDAX vs. GELSENWASSER
Performance |
| Timeline |
| Xtrackers LevDAX |
| GELSENWASSER |
Xtrackers LevDAX and GELSENWASSER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and GELSENWASSER
The main advantage of trading using opposite Xtrackers LevDAX and GELSENWASSER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, GELSENWASSER 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 GELSENWASSER will offset losses from the drop in GELSENWASSER'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 |
| GELSENWASSER vs. EAST SIDE GAMES | GELSENWASSER vs. Penn National Gaming | GELSENWASSER vs. Alaska Air Group | GELSENWASSER vs. Hochschild Mining plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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