Correlation Between Xtrackers LevDAX and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and SPDR SP Technology, you can compare the effects of market volatilities on Xtrackers LevDAX and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and SPDR SP.
Diversification Opportunities for Xtrackers LevDAX and SPDR SP
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtrackers and SPDR is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and SPDR SP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Technology 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Technology has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and SPDR SP go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and SPDR SP
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.77 times more return on investment than SPDR SP. However, Xtrackers LevDAX is 1.29 times less risky than SPDR SP. It trades about 0.39 of its potential returns per unit of risk. SPDR SP Technology is currently generating about -0.05 per unit of risk. If you would invest 20,810 in Xtrackers LevDAX on November 9, 2024 and sell it today you would earn a total of 2,530 from holding Xtrackers LevDAX or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. SPDR SP Technology
Performance |
| Timeline |
| Xtrackers LevDAX |
| SPDR SP Technology |
Xtrackers LevDAX and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and SPDR SP
The main advantage of trading using opposite Xtrackers LevDAX and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP'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 |
| SPDR SP vs. SPDR Barclays 10 | SPDR SP vs. SPDR ICE BofA | SPDR SP vs. SPDR SP Utilities | SPDR SP vs. SPDR ICE BofA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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