Correlation Between SPDR Gold and Xtrackers LevDAX
Can any of the company-specific risk be diversified away by investing in both SPDR Gold 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 SPDR Gold and Xtrackers LevDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and Xtrackers LevDAX, you can compare the effects of market volatilities on SPDR Gold 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 SPDR Gold with a short position of Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Xtrackers LevDAX.
Diversification Opportunities for SPDR Gold and Xtrackers LevDAX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and Xtrackers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX and SPDR Gold 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 SPDR Gold Shares 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 SPDR Gold i.e., SPDR Gold and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between SPDR Gold and Xtrackers LevDAX
If you would invest 17,894 in Xtrackers LevDAX on August 24, 2024 and sell it today you would earn a total of 528.00 from holding Xtrackers LevDAX or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
SPDR Gold Shares vs. Xtrackers LevDAX
Performance |
| Timeline |
| SPDR Gold Shares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Xtrackers LevDAX |
SPDR Gold and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Xtrackers LevDAX
The main advantage of trading using opposite SPDR Gold and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold 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.The idea behind SPDR Gold Shares and Xtrackers LevDAX 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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