Correlation Between Xtrackers USD and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Xtrackers USD 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 USD 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 USD Corporate and Dow Jones Industrial, you can compare the effects of market volatilities on Xtrackers USD 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 USD with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers USD and Dow Jones.
Diversification Opportunities for Xtrackers USD and Dow Jones
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers USD Corporate 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 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 Corporate 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 USD i.e., Xtrackers USD and Dow Jones go up and down completely randomly.
Pair Corralation between Xtrackers USD and Dow Jones
Assuming the 90 days trading horizon Xtrackers USD Corporate is expected to under-perform the Dow Jones. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers USD Corporate is 1.14 times less risky than Dow Jones. The etf trades about -0.03 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Xtrackers USD Corporate vs. Dow Jones Industrial
Performance |
| Timeline |
Xtrackers USD and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xtrackers USD Corporate
Pair trading matchups for Xtrackers USD
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xtrackers USD and Dow Jones
The main advantage of trading using opposite Xtrackers USD and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers USD 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 USD vs. UBSFund Solutions MSCI | Xtrackers USD vs. Vanguard SP 500 | Xtrackers USD vs. iShares VII PLC | Xtrackers USD vs. iShares Core SP |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |