Correlation Between Xtrackers ShortDAX and IShares VII
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and IShares VII 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 ShortDAX and IShares VII into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX Daily and iShares VII PLC, you can compare the effects of market volatilities on Xtrackers ShortDAX and IShares VII 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 ShortDAX with a short position of IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and IShares VII.
Diversification Opportunities for Xtrackers ShortDAX and IShares VII
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and IShares is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX Daily and iShares VII PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII PLC and Xtrackers ShortDAX 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 ShortDAX Daily are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII PLC has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and IShares VII go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and IShares VII
Assuming the 90 days trading horizon Xtrackers ShortDAX Daily is expected to under-perform the IShares VII. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX Daily is 1.56 times less risky than IShares VII. The etf trades about -0.06 of its potential returns per unit of risk. The iShares VII PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,706,500 in iShares VII PLC on August 28, 2024 and sell it today you would earn a total of 1,083,500 from holding iShares VII PLC or generate 40.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX Daily vs. iShares VII PLC
Performance |
| Timeline |
| Xtrackers ShortDAX Daily |
| iShares VII PLC |
Xtrackers ShortDAX and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and IShares VII
The main advantage of trading using opposite Xtrackers ShortDAX and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, IShares VII 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 IShares VII will offset losses from the drop in IShares VII's long position.| Xtrackers ShortDAX vs. UBSFund Solutions MSCI | Xtrackers ShortDAX vs. iShares VII PLC | Xtrackers ShortDAX vs. iShares SP 500 | Xtrackers ShortDAX vs. Lyxor UCITS Stoxx |
| IShares VII vs. UBSFund Solutions MSCI | IShares VII vs. iShares SP 500 | IShares VII vs. Lyxor UCITS Stoxx | IShares VII vs. iShares JP Morgan |
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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