Correlation Between Xtrackers ShortDAX and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI Europe, you can compare the effects of market volatilities on Xtrackers ShortDAX and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and SPDR MSCI.
Diversification Opportunities for Xtrackers ShortDAX and SPDR MSCI
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and SPDR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX Daily and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and SPDR MSCI go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and SPDR MSCI
Assuming the 90 days trading horizon Xtrackers ShortDAX Daily is expected to under-perform the SPDR MSCI. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX Daily is 1.31 times less risky than SPDR MSCI. The etf trades about -0.06 of its potential returns per unit of risk. The SPDR MSCI Europe is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 27,350 in SPDR MSCI Europe on August 24, 2024 and sell it today you would earn a total of 495.00 from holding SPDR MSCI Europe or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX Daily vs. SPDR MSCI Europe
Performance |
| Timeline |
| Xtrackers ShortDAX Daily |
| SPDR MSCI Europe |
Xtrackers ShortDAX and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and SPDR MSCI
The main advantage of trading using opposite Xtrackers ShortDAX and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| Xtrackers ShortDAX vs. Xtrackers MSCI USA | Xtrackers ShortDAX vs. Xtrackers USD Corporate | Xtrackers ShortDAX vs. Xtrackers MSCI AC | Xtrackers ShortDAX vs. Xtrackers MSCI World |
| SPDR MSCI vs. UBSFund Solutions MSCI | SPDR MSCI vs. iShares VII PLC | SPDR MSCI vs. iShares Core SP | SPDR MSCI vs. Lyxor Japan UCITS |
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 CEOs Directory module to screen CEOs from public companies around the world.
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