Correlation Between Xtrackers ShortDAX and Cellink AB

Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Cellink AB 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 Cellink AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers ShortDAX and Cellink AB, you can compare the effects of market volatilities on Xtrackers ShortDAX and Cellink AB 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 Cellink AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Cellink AB.

Diversification Opportunities for Xtrackers ShortDAX and Cellink AB

0.63

Correlation Coefficient

Xtrackers ShortDAX  Cellink AB

Poor diversification

The 3 months correlation between Xtrackers and Cellink is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB 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 are associated (or correlated) with Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Cellink AB go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Cellink AB

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Cellink AB. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 6.8 times less risky than Cellink AB. The etf trades about -0.5 of its potential returns per unit of risk. The Cellink AB is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  322.00  in Cellink AB on September 13, 2024 and sell it today you would lose (44.00) from holding Cellink AB or give up 13.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Xtrackers ShortDAX  vs.  Cellink AB

Xtrackers ShortDAX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xtrackers ShortDAX and Cellink AB

The main advantage of trading using opposite Xtrackers ShortDAX and Cellink AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Cellink AB 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 Cellink AB will offset losses from the drop in Cellink AB's long position.

The idea behind Xtrackers ShortDAX and Cellink AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.