Correlation Between Encavis AG and Xtrackers ShortDAX
Can any of the company-specific risk be diversified away by investing in both Encavis AG and Xtrackers ShortDAX 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 Encavis AG and Xtrackers ShortDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encavis AG and Xtrackers ShortDAX, you can compare the effects of market volatilities on Encavis AG and Xtrackers ShortDAX 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 Encavis AG with a short position of Xtrackers ShortDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encavis AG and Xtrackers ShortDAX.
Diversification Opportunities for Encavis AG and Xtrackers ShortDAX
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Encavis and Xtrackers is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Encavis AG and Xtrackers ShortDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers ShortDAX and Encavis AG 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 Encavis AG are associated (or correlated) with Xtrackers ShortDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers ShortDAX has no effect on the direction of Encavis AG i.e., Encavis AG and Xtrackers ShortDAX go up and down completely randomly.
Pair Corralation between Encavis AG and Xtrackers ShortDAX
Assuming the 90 days trading horizon Encavis AG is expected to generate 0.36 times more return on investment than Xtrackers ShortDAX. However, Encavis AG is 2.8 times less risky than Xtrackers ShortDAX. It trades about 0.0 of its potential returns per unit of risk. Xtrackers ShortDAX is currently generating about -0.14 per unit of risk. If you would invest 1,713 in Encavis AG on September 3, 2024 and sell it today you would lose (1.00) from holding Encavis AG or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Encavis AG vs. Xtrackers ShortDAX
Performance |
| Timeline |
| Encavis AG |
| Xtrackers ShortDAX |
Encavis AG and Xtrackers ShortDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encavis AG and Xtrackers ShortDAX
The main advantage of trading using opposite Encavis AG and Xtrackers ShortDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encavis AG position performs unexpectedly, Xtrackers ShortDAX 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 ShortDAX will offset losses from the drop in Xtrackers ShortDAX's long position.| Encavis AG vs. CN LGYPWRGRUNSPADR10 | Encavis AG vs. ALERION CLEANPOWER | Encavis AG vs. PNE AG | Encavis AG vs. Lyxor 1 |
| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX 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 CEOs Directory module to screen CEOs from public companies around the world.
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