Correlation Between Xtrackers and LYXOR DAILY
Can any of the company-specific risk be diversified away by investing in both Xtrackers and LYXOR DAILY 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 LYXOR DAILY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and LYXOR DAILY SHORTDAX, you can compare the effects of market volatilities on Xtrackers and LYXOR DAILY 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 LYXOR DAILY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and LYXOR DAILY.
Diversification Opportunities for Xtrackers and LYXOR DAILY
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and LYXOR is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and LYXOR DAILY SHORTDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR DAILY SHORTDAX 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 II are associated (or correlated) with LYXOR DAILY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR DAILY SHORTDAX has no effect on the direction of Xtrackers i.e., Xtrackers and LYXOR DAILY go up and down completely randomly.
Pair Corralation between Xtrackers and LYXOR DAILY
Assuming the 90 days trading horizon Xtrackers II is expected to generate 0.48 times more return on investment than LYXOR DAILY. However, Xtrackers II is 2.08 times less risky than LYXOR DAILY. It trades about 0.07 of its potential returns per unit of risk. LYXOR DAILY SHORTDAX is currently generating about -0.04 per unit of risk. If you would invest 734.00 in Xtrackers II on September 5, 2024 and sell it today you would earn a total of 52.00 from holding Xtrackers II or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers II vs. LYXOR DAILY SHORTDAX
Performance |
| Timeline |
| Xtrackers II |
| LYXOR DAILY SHORTDAX |
Xtrackers and LYXOR DAILY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and LYXOR DAILY
The main advantage of trading using opposite Xtrackers and LYXOR DAILY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, LYXOR DAILY 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 LYXOR DAILY will offset losses from the drop in LYXOR DAILY's long position.| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| LYXOR DAILY vs. iShares Govt Bond | LYXOR DAILY vs. Amundi MSCI Europe | LYXOR DAILY vs. iShares Global AAA AA | LYXOR DAILY vs. iShares Smart City |
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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