Correlation Between Xtrackers USD and Xtrackers International
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD and Xtrackers International 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 USD and Xtrackers International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers USD High and Xtrackers International Real, you can compare the effects of market volatilities on Xtrackers USD and Xtrackers International 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 USD with a short position of Xtrackers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and Xtrackers International.
Diversification Opportunities for Xtrackers USD and Xtrackers International
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Xtrackers is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD High and Xtrackers International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers International and Xtrackers USD 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 USD High are associated (or correlated) with Xtrackers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers International has no effect on the direction of Xtrackers USD i.e., Xtrackers USD and Xtrackers International go up and down completely randomly.
Pair Corralation between Xtrackers USD and Xtrackers International
Given the investment horizon of 90 days Xtrackers USD High is expected to generate 0.24 times more return on investment than Xtrackers International. However, Xtrackers USD High is 4.11 times less risky than Xtrackers International. It trades about 0.22 of its potential returns per unit of risk. Xtrackers International Real is currently generating about 0.02 per unit of risk. If you would invest 3,443 in Xtrackers USD High on August 30, 2024 and sell it today you would earn a total of 226.00 from holding Xtrackers USD High or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers USD High vs. Xtrackers International Real
Performance |
| Timeline |
| Xtrackers USD High |
| Xtrackers International |
Xtrackers USD and Xtrackers International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers USD and Xtrackers International
The main advantage of trading using opposite Xtrackers USD and Xtrackers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD position performs unexpectedly, Xtrackers International 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 International will offset losses from the drop in Xtrackers International's long position.| Xtrackers USD vs. SPDR Bloomberg Emerging | Xtrackers USD vs. iShares Broad USD | Xtrackers USD vs. SPDR Barclays Intermediate | Xtrackers USD vs. Schwab Intermediate Term Treasury |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |