Correlation Between Xtrackers ShortDAX and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Virtu Financial 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 Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Virtu Financial, you can compare the effects of market volatilities on Xtrackers ShortDAX and Virtu Financial 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 Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Virtu Financial.
Diversification Opportunities for Xtrackers ShortDAX and Virtu Financial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Virtu is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial 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 Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Virtu Financial go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Virtu Financial
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Virtu Financial. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.43 times less risky than Virtu Financial. The etf trades about -0.11 of its potential returns per unit of risk. The Virtu Financial is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,841 in Virtu Financial on October 6, 2024 and sell it today you would earn a total of 639.00 from holding Virtu Financial or generate 22.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Virtu Financial
Performance |
Timeline |
Xtrackers ShortDAX |
Virtu Financial |
Xtrackers ShortDAX and Virtu Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Virtu Financial
The main advantage of trading using opposite Xtrackers ShortDAX and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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