Correlation Between Xtrackers ShortDAX and Far East
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Far East 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 Far East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Far East Horizon, you can compare the effects of market volatilities on Xtrackers ShortDAX and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Far East.
Diversification Opportunities for Xtrackers ShortDAX and Far East
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Far is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Far East go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Far East
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Far East. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.28 times less risky than Far East. The etf trades about -0.46 of its potential returns per unit of risk. The Far East Horizon is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Far East Horizon on September 22, 2024 and sell it today you would earn a total of 6.00 from holding Far East Horizon or generate 10.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 91.3% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Far East Horizon
Performance |
Timeline |
Xtrackers ShortDAX |
Far East Horizon |
Xtrackers ShortDAX and Far East Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Far East
The main advantage of trading using opposite Xtrackers ShortDAX and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East'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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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