Correlation Between Xtrackers and Xtrackers LevDAX
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Xtrackers LevDAX 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 and Xtrackers LevDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP and Xtrackers LevDAX, you can compare the effects of market volatilities on Xtrackers and Xtrackers LevDAX 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 with a short position of Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Xtrackers LevDAX.
Diversification Opportunities for Xtrackers and Xtrackers LevDAX
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Xtrackers is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX and Xtrackers 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 SP are associated (or correlated) with Xtrackers LevDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers LevDAX has no effect on the direction of Xtrackers i.e., Xtrackers and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between Xtrackers and Xtrackers LevDAX
Assuming the 90 days trading horizon Xtrackers SP is expected to under-perform the Xtrackers LevDAX. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers SP is 1.58 times less risky than Xtrackers LevDAX. The etf trades about -0.04 of its potential returns per unit of risk. The Xtrackers LevDAX is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,422 in Xtrackers LevDAX on August 27, 2024 and sell it today you would earn a total of 5,000 from holding Xtrackers LevDAX or generate 37.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP vs. Xtrackers LevDAX
Performance |
| Timeline |
| Xtrackers SP |
| Xtrackers LevDAX |
Xtrackers and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Xtrackers LevDAX
The main advantage of trading using opposite Xtrackers and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Xtrackers LevDAX 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 LevDAX will offset losses from the drop in Xtrackers LevDAX's long position.| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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