Correlation Between NYSE Composite and DBX ETF
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and DBX ETF 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 NYSE Composite and DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and DBX ETF Trust, you can compare the effects of market volatilities on NYSE Composite and DBX ETF 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 NYSE Composite with a short position of DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and DBX ETF.
Diversification Opportunities for NYSE Composite and DBX ETF
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and DBX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust and NYSE Composite 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 NYSE Composite are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and DBX ETF go up and down completely randomly.
Pair Corralation between NYSE Composite and DBX ETF
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than DBX ETF. However, NYSE Composite is 1.42 times less risky than DBX ETF. It trades about 0.07 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.03 per unit of risk. If you would invest 1,588,356 in NYSE Composite on September 8, 2024 and sell it today you would earn a total of 422,423 from holding NYSE Composite or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.39% |
| Values | Daily Returns |
NYSE Composite vs. DBX ETF Trust
Performance |
| Timeline |
NYSE Composite and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
DBX ETF Trust
Pair trading matchups for DBX ETF
Pair Trading with NYSE Composite and DBX ETF
The main advantage of trading using opposite NYSE Composite and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| NYSE Composite vs. Brandywine Realty Trust | NYSE Composite vs. Willamette Valley Vineyards | NYSE Composite vs. Weyco Group | NYSE Composite vs. Skechers USA |
| DBX ETF vs. Xtrackers MSCI EAFE | DBX ETF vs. SPDR MSCI Emerging | DBX ETF vs. NuShares ETF Trust | DBX ETF vs. Xtrackers MSCI USA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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