Correlation Between Xtrackers ShortDAX and Deere
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Deere 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 Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Deere Company, you can compare the effects of market volatilities on Xtrackers ShortDAX and Deere 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 Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Deere.
Diversification Opportunities for Xtrackers ShortDAX and Deere
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Deere is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company 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 Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Deere go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Deere
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Deere. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.12 times less risky than Deere. The etf trades about -0.15 of its potential returns per unit of risk. The Deere Company is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 35,399 in Deere Company on September 14, 2024 and sell it today you would earn a total of 7,126 from holding Deere Company or generate 20.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Deere Company
Performance |
Timeline |
Xtrackers ShortDAX |
Deere Company |
Xtrackers ShortDAX and Deere Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Deere
The main advantage of trading using opposite Xtrackers ShortDAX and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere'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 |
Deere vs. Japan Tobacco | Deere vs. Ryanair Holdings plc | Deere vs. PennantPark Investment | Deere vs. Wizz Air Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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