Correlation Between Xtrackers ShortDAX and AIRBNB INC

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Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and AIRBNB INC 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 AIRBNB INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and AIRBNB INC DL 01, you can compare the effects of market volatilities on Xtrackers ShortDAX and AIRBNB INC 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 AIRBNB INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and AIRBNB INC.

Diversification Opportunities for Xtrackers ShortDAX and AIRBNB INC

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Xtrackers and AIRBNB is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and AIRBNB INC DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRBNB INC DL 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 AIRBNB INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRBNB INC DL has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and AIRBNB INC go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and AIRBNB INC

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the AIRBNB INC. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.83 times less risky than AIRBNB INC. The etf trades about -0.07 of its potential returns per unit of risk. The AIRBNB INC DL 01 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  12,486  in AIRBNB INC DL 01 on September 1, 2024 and sell it today you would earn a total of  576.00  from holding AIRBNB INC DL 01 or generate 4.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Xtrackers ShortDAX  vs.  AIRBNB INC DL 01

 Performance 
       Timeline  
Xtrackers ShortDAX 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xtrackers ShortDAX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
AIRBNB INC DL 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in AIRBNB INC DL 01 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AIRBNB INC reported solid returns over the last few months and may actually be approaching a breakup point.

Xtrackers ShortDAX and AIRBNB INC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtrackers ShortDAX and AIRBNB INC

The main advantage of trading using opposite Xtrackers ShortDAX and AIRBNB INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, AIRBNB INC 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 AIRBNB INC will offset losses from the drop in AIRBNB INC's long position.
The idea behind Xtrackers ShortDAX and AIRBNB INC DL 01 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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