Correlation Between Xtrackers ShortDAX and Simon Property

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

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

Diversification Opportunities for Xtrackers ShortDAX and Simon Property

-0.56

Correlation Coefficient

Xtrackers ShortDAX  Simon Property

Excellent diversification

The 3 months correlation between Xtrackers and Simon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Simon Property go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Simon Property

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Simon Property. In addition to that, Xtrackers ShortDAX is 1.83 times more volatile than Simon Property Group. It trades about -0.3 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.18 per unit of volatility. If you would invest  16,540  in Simon Property Group on September 12, 2024 and sell it today you would earn a total of  550.00  from holding Simon Property Group or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Xtrackers ShortDAX  vs.  Simon Property Group

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 unsteady 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.

Simon Property Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Simon Property reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtrackers ShortDAX and Simon Property

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

The idea behind Xtrackers ShortDAX and Simon Property Group 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.