Correlation Between Xtrackers ShortDAX and R Co

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

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

Diversification Opportunities for Xtrackers ShortDAX and R Co

0.22

Correlation Coefficient

Xtrackers ShortDAX  R Co

Modest diversification

The 3 months correlation between Xtrackers and 0P0000PPEZ is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and R co Thematic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R co Thematic 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 R Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R co Thematic has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and R Co go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and R Co

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the R Co. In addition to that, Xtrackers ShortDAX is 2.67 times more volatile than R co Thematic Silver. It trades about -0.08 of its total potential returns per unit of risk. R co Thematic Silver is currently generating about -0.02 per unit of volatility. If you would invest  30,063  in R co Thematic Silver on September 22, 2024 and sell it today you would lose (468.00) from holding R co Thematic Silver or give up 1.56% of portfolio value over 90 days.

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

Xtrackers ShortDAX  vs.  R co Thematic Silver

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 latest unsteady performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

R co Thematic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days R co Thematic Silver has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, R Co is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Xtrackers ShortDAX and R Co

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

The idea behind Xtrackers ShortDAX and R co Thematic Silver 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.