Correlation Between TSJA and DBX ETF
Can any of the company-specific risk be diversified away by investing in both TSJA 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 TSJA and DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSJA and DBX ETF Trust, you can compare the effects of market volatilities on TSJA 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 TSJA with a short position of DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and DBX ETF.
Diversification Opportunities for TSJA and DBX ETF
Very poor diversification
The 3 months correlation between TSJA and DBX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TSJA 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 TSJA 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 TSJA 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 TSJA i.e., TSJA and DBX ETF go up and down completely randomly.
Pair Corralation between TSJA and DBX ETF
Given the investment horizon of 90 days TSJA is expected to generate 0.63 times more return on investment than DBX ETF. However, TSJA is 1.58 times less risky than DBX ETF. It trades about 0.16 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.05 per unit of risk. If you would invest 2,380 in TSJA on September 13, 2024 and sell it today you would earn a total of 393.00 from holding TSJA or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 30.92% |
| Values | Daily Returns |
TSJA vs. DBX ETF Trust
Performance |
| Timeline |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DBX ETF Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
TSJA and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSJA and DBX ETF
The main advantage of trading using opposite TSJA and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA 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.The idea behind TSJA and DBX ETF Trust 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.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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