Correlation Between DSJA and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both DSJA and Xtrackers MSCI 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 DSJA and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and Xtrackers MSCI EAFE, you can compare the effects of market volatilities on DSJA and Xtrackers MSCI 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 DSJA with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and Xtrackers MSCI.
Diversification Opportunities for DSJA and Xtrackers MSCI
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DSJA and Xtrackers is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and Xtrackers MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EAFE and DSJA 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 DSJA are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EAFE has no effect on the direction of DSJA i.e., DSJA and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between DSJA and Xtrackers MSCI
Given the investment horizon of 90 days DSJA is expected to generate 0.9 times more return on investment than Xtrackers MSCI. However, DSJA is 1.11 times less risky than Xtrackers MSCI. It trades about 0.14 of its potential returns per unit of risk. Xtrackers MSCI EAFE is currently generating about 0.06 per unit of risk. If you would invest 2,468 in DSJA on August 30, 2024 and sell it today you would earn a total of 397.00 from holding DSJA or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.25% |
| Values | Daily Returns |
DSJA vs. Xtrackers MSCI EAFE
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xtrackers MSCI EAFE |
DSJA and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and Xtrackers MSCI
The main advantage of trading using opposite DSJA and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.The idea behind DSJA and Xtrackers MSCI EAFE 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.| Xtrackers MSCI vs. Fidelity International High | Xtrackers MSCI vs. Global X MSCI | Xtrackers MSCI vs. Xtrackers USD High | Xtrackers MSCI vs. First Trust Dow |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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