Correlation Between LYXOR DAILY and Xtrackers LevDAX
Can any of the company-specific risk be diversified away by investing in both LYXOR DAILY 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 LYXOR DAILY and Xtrackers LevDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LYXOR DAILY SHORTDAX and Xtrackers LevDAX, you can compare the effects of market volatilities on LYXOR DAILY 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 LYXOR DAILY with a short position of Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of LYXOR DAILY and Xtrackers LevDAX.
Diversification Opportunities for LYXOR DAILY and Xtrackers LevDAX
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LYXOR and Xtrackers is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding LYXOR DAILY SHORTDAX and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX and LYXOR DAILY 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 LYXOR DAILY SHORTDAX 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 LYXOR DAILY i.e., LYXOR DAILY and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between LYXOR DAILY and Xtrackers LevDAX
Assuming the 90 days trading horizon LYXOR DAILY SHORTDAX is expected to generate 0.89 times more return on investment than Xtrackers LevDAX. However, LYXOR DAILY SHORTDAX is 1.12 times less risky than Xtrackers LevDAX. It trades about 0.04 of its potential returns per unit of risk. Xtrackers LevDAX is currently generating about -0.08 per unit of risk. If you would invest 86.00 in LYXOR DAILY SHORTDAX on August 24, 2024 and sell it today you would earn a total of 1.00 from holding LYXOR DAILY SHORTDAX or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LYXOR DAILY SHORTDAX vs. Xtrackers LevDAX
Performance |
| Timeline |
| LYXOR DAILY SHORTDAX |
| Xtrackers LevDAX |
LYXOR DAILY and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LYXOR DAILY and Xtrackers LevDAX
The main advantage of trading using opposite LYXOR DAILY and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LYXOR DAILY 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.| LYXOR DAILY vs. LYXOR EURO STOXX | LYXOR DAILY vs. LYXOR DAILY SHORTDAX | LYXOR DAILY vs. LYXOR EURO STOXX | LYXOR DAILY vs. LYXOR Index Fund |
| Xtrackers LevDAX vs. UBS Fund Solutions | Xtrackers LevDAX vs. Xtrackers II | Xtrackers LevDAX vs. Xtrackers Nikkei 225 | Xtrackers LevDAX vs. SPDR Gold Shares |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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