Correlation Between Xtrackers USD and Xtrackers High
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD and Xtrackers High 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 High 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 High Beta, you can compare the effects of market volatilities on Xtrackers USD and Xtrackers High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and Xtrackers High.
Diversification Opportunities for Xtrackers USD and Xtrackers High
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Xtrackers and Xtrackers is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD High and Xtrackers High Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers High Beta 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers High Beta has no effect on the direction of Xtrackers USD i.e., Xtrackers USD and Xtrackers High go up and down completely randomly.
Pair Corralation between Xtrackers USD and Xtrackers High
Given the investment horizon of 90 days Xtrackers USD is expected to generate 1.07 times less return on investment than Xtrackers High. In addition to that, Xtrackers USD is 1.02 times more volatile than Xtrackers High Beta. It trades about 0.28 of its total potential returns per unit of risk. Xtrackers High Beta is currently generating about 0.3 per unit of volatility. If you would invest 4,144 in Xtrackers High Beta on October 20, 2024 and sell it today you would earn a total of 79.00 from holding Xtrackers High Beta or generate 1.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers USD High vs. Xtrackers High Beta
Performance |
Timeline |
Xtrackers USD High |
Xtrackers High Beta |
Xtrackers USD and Xtrackers High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers USD and Xtrackers High
The main advantage of trading using opposite Xtrackers USD and Xtrackers High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD position performs unexpectedly, Xtrackers High 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 High will offset losses from the drop in Xtrackers High'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 |
Xtrackers High vs. Xtrackers Short Duration | Xtrackers High vs. FlexShares High Yield | Xtrackers High vs. Xtrackers Low Beta | Xtrackers High vs. iShares Edge High |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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