Correlation Between Xtrackers LevDAX and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and OPKO HEALTH 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 OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and OPKO HEALTH, you can compare the effects of market volatilities on Xtrackers LevDAX and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and OPKO HEALTH.
Diversification Opportunities for Xtrackers LevDAX and OPKO HEALTH
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xtrackers and OPKO is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and OPKO HEALTH
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.14 times more return on investment than OPKO HEALTH. However, Xtrackers LevDAX is 1.14 times more volatile than OPKO HEALTH. It trades about 0.46 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.24 per unit of risk. If you would invest 19,946 in Xtrackers LevDAX on October 24, 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 Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Xtrackers LevDAX vs. OPKO HEALTH
Performance |
| Timeline |
| Xtrackers LevDAX |
| OPKO HEALTH |
Xtrackers LevDAX and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and OPKO HEALTH
The main advantage of trading using opposite Xtrackers LevDAX and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH'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 |
| OPKO HEALTH vs. UNIQA INSURANCE GR | OPKO HEALTH vs. VIRGIN WINES UK | OPKO HEALTH vs. Goosehead Insurance | OPKO HEALTH vs. Selective Insurance Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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