Correlation Between Xtrackers LevDAX and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Astellas Pharma 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 Astellas Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Astellas Pharma, you can compare the effects of market volatilities on Xtrackers LevDAX and Astellas Pharma 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 Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Astellas Pharma.
Diversification Opportunities for Xtrackers LevDAX and Astellas Pharma
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Astellas is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Astellas Pharma go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Astellas Pharma
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.96 times more return on investment than Astellas Pharma. However, Xtrackers LevDAX is 1.04 times less risky than Astellas Pharma. It trades about 0.06 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.04 per unit of risk. If you would invest 11,908 in Xtrackers LevDAX on August 27, 2024 and sell it today you would earn a total of 6,514 from holding Xtrackers LevDAX or generate 54.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Astellas Pharma
Performance |
| Timeline |
| Xtrackers LevDAX |
| Astellas Pharma |
Xtrackers LevDAX and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Astellas Pharma
The main advantage of trading using opposite Xtrackers LevDAX and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma'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 |
| Astellas Pharma vs. CDN IMPERIAL BANK | Astellas Pharma vs. ANTA SPORTS PRODUCT | Astellas Pharma vs. QBE Insurance Group | Astellas Pharma vs. Sporttotal AG |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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