Correlation Between DAX Index and Leverage Shares
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By analyzing existing cross correlation between DAX Index and Leverage Shares 3x, you can compare the effects of market volatilities on DAX Index and Leverage Shares 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 DAX Index with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Leverage Shares.
Diversification Opportunities for DAX Index and Leverage Shares
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Leverage is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x and DAX Index 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 DAX Index are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of DAX Index i.e., DAX Index and Leverage Shares go up and down completely randomly.
Pair Corralation between DAX Index and Leverage Shares
Assuming the 90 days trading horizon DAX Index is expected to generate 17.01 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, DAX Index is 7.66 times less risky than Leverage Shares. It trades about 0.05 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Leverage Shares 3x on September 3, 2024 and sell it today you would earn a total of 2,042 from holding Leverage Shares 3x or generate 110.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Leverage Shares 3x
Performance |
| Timeline |
DAX Index and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Leverage Shares 3x
Pair trading matchups for Leverage Shares
Pair Trading with DAX Index and Leverage Shares
The main advantage of trading using opposite DAX Index and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| DAX Index vs. SPORT LISBOA E | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. Live Nation Entertainment | DAX Index vs. Transport International Holdings |
| Leverage Shares vs. UBS Fund Solutions | Leverage Shares vs. Xtrackers II | Leverage Shares vs. Xtrackers Nikkei 225 | Leverage Shares vs. iShares VII PLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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