Correlation Between Xtrackers ShortDAX and Aberdeen Global

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

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

Diversification Opportunities for Xtrackers ShortDAX and Aberdeen Global

0.66

Correlation Coefficient

Xtrackers ShortDAX  Aberdeen Global

Poor diversification

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

Pair Corralation between Xtrackers ShortDAX and Aberdeen Global

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Aberdeen Global. In addition to that, Xtrackers ShortDAX is 2.15 times more volatile than Aberdeen Global Asia. It trades about -0.22 of its total potential returns per unit of risk. Aberdeen Global Asia is currently generating about -0.1 per unit of volatility. If you would invest  8,679  in Aberdeen Global Asia on December 24, 2024 and sell it today you would lose (497.00) from holding Aberdeen Global Asia or give up 5.73% of portfolio value over 90 days.

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

Xtrackers ShortDAX  vs.  Aberdeen Global Asia

Xtrackers ShortDAX

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Aberdeen Global Asia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Global Asia has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Xtrackers ShortDAX and Aberdeen Global

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

The idea behind Xtrackers ShortDAX and Aberdeen Global Asia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..