Correlation Between Xtrackers and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Dow Jones 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 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Ie Plc and Dow Jones Industrial, you can compare the effects of market volatilities on Xtrackers and Dow Jones 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 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Dow Jones.
Diversification Opportunities for Xtrackers and Dow Jones
Almost no diversification
The 3 months correlation between Xtrackers and Dow is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Ie Plc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Xtrackers 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 Ie Plc are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Xtrackers i.e., Xtrackers and Dow Jones go up and down completely randomly.
Pair Corralation between Xtrackers and Dow Jones
Assuming the 90 days trading horizon Xtrackers Ie Plc is expected to generate 1.11 times more return on investment than Dow Jones. However, Xtrackers is 1.11 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 3,227 in Xtrackers Ie Plc on August 31, 2024 and sell it today you would earn a total of 1,245 from holding Xtrackers Ie Plc or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Xtrackers Ie Plc vs. Dow Jones Industrial
Performance |
| Timeline |
Xtrackers and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xtrackers Ie Plc
Pair trading matchups for Xtrackers
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xtrackers and Dow Jones
The main advantage of trading using opposite Xtrackers and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Xtrackers vs. Scottish Mortgage Investment | Xtrackers vs. VinaCapital Vietnam Opportunity | Xtrackers vs. Edinburgh Worldwide Investment | Xtrackers vs. Baillie Gifford Growth |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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