Correlation Between Xtrackers and Xtrackers Stoxx
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Xtrackers Stoxx 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 and Xtrackers Stoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP and Xtrackers Stoxx, you can compare the effects of market volatilities on Xtrackers and Xtrackers Stoxx 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 with a short position of Xtrackers Stoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Xtrackers Stoxx.
Diversification Opportunities for Xtrackers and Xtrackers Stoxx
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Xtrackers is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP and Xtrackers Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Stoxx and Xtrackers 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 SP are associated (or correlated) with Xtrackers Stoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Stoxx has no effect on the direction of Xtrackers i.e., Xtrackers and Xtrackers Stoxx go up and down completely randomly.
Pair Corralation between Xtrackers and Xtrackers Stoxx
Assuming the 90 days trading horizon Xtrackers SP is expected to generate 0.83 times more return on investment than Xtrackers Stoxx. However, Xtrackers SP is 1.2 times less risky than Xtrackers Stoxx. It trades about -0.02 of its potential returns per unit of risk. Xtrackers Stoxx is currently generating about -0.08 per unit of risk. If you would invest 624.00 in Xtrackers SP on September 12, 2024 and sell it today you would lose (8.00) from holding Xtrackers SP or give up 1.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers SP vs. Xtrackers Stoxx
Performance |
Timeline |
Xtrackers SP |
Xtrackers Stoxx |
Xtrackers and Xtrackers Stoxx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers and Xtrackers Stoxx
The main advantage of trading using opposite Xtrackers and Xtrackers Stoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Xtrackers Stoxx 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 Stoxx will offset losses from the drop in Xtrackers Stoxx's long position.Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
Xtrackers Stoxx vs. UBS Fund Solutions | Xtrackers Stoxx vs. Xtrackers II | Xtrackers Stoxx vs. Xtrackers Nikkei 225 | Xtrackers Stoxx vs. iShares VII PLC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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