Correlation Between Xtrackers Russell and Xtrackers
Can any of the company-specific risk be diversified away by investing in both Xtrackers Russell and Xtrackers 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 Russell and Xtrackers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Russell 2000 and Xtrackers II EUR, you can compare the effects of market volatilities on Xtrackers Russell and Xtrackers 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 Russell with a short position of Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Russell and Xtrackers.
Diversification Opportunities for Xtrackers Russell and Xtrackers
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xtrackers and Xtrackers is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Russell 2000 and Xtrackers II EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers II EUR and Xtrackers Russell 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 Russell 2000 are associated (or correlated) with Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers II EUR has no effect on the direction of Xtrackers Russell i.e., Xtrackers Russell and Xtrackers go up and down completely randomly.
Pair Corralation between Xtrackers Russell and Xtrackers
Assuming the 90 days trading horizon Xtrackers Russell 2000 is expected to generate 3.75 times more return on investment than Xtrackers. However, Xtrackers Russell is 3.75 times more volatile than Xtrackers II EUR. It trades about 0.15 of its potential returns per unit of risk. Xtrackers II EUR is currently generating about 0.28 per unit of risk. If you would invest 2,653,100 in Xtrackers Russell 2000 on November 4, 2024 and sell it today you would earn a total of 70,050 from holding Xtrackers Russell 2000 or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Russell 2000 vs. Xtrackers II EUR
Performance |
| Timeline |
| Xtrackers Russell 2000 |
| Xtrackers II EUR |
Xtrackers Russell and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Russell and Xtrackers
The main advantage of trading using opposite Xtrackers Russell and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Russell position performs unexpectedly, Xtrackers 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 Xtrackers will offset losses from the drop in Xtrackers' long position.| Xtrackers Russell vs. Leverage Shares 3x | Xtrackers Russell vs. GraniteShares 3x Short | Xtrackers Russell vs. SP 500 VIX | Xtrackers Russell vs. Leverage Shares 3x |
| Xtrackers vs. Leverage Shares 3x | Xtrackers vs. GraniteShares 3x Short | Xtrackers vs. SP 500 VIX | Xtrackers vs. Leverage Shares 3x |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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