Correlation Between Xtrackers ShortDAX and Jardine Matheson

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

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

Diversification Opportunities for Xtrackers ShortDAX and Jardine Matheson

-0.36

Correlation Coefficient

Xtrackers ShortDAX  Jardine Matheson

Very good diversification

The 3 months correlation between Xtrackers and Jardine is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings 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 Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Jardine Matheson go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Jardine Matheson

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.58 times more return on investment than Jardine Matheson. However, Xtrackers ShortDAX is 1.74 times less risky than Jardine Matheson. It trades about 0.08 of its potential returns per unit of risk. Jardine Matheson Holdings is currently generating about -0.34 per unit of risk. If you would invest  76.00  in Xtrackers ShortDAX on October 10, 2024 and sell it today you would earn a total of  1.00  from holding Xtrackers ShortDAX or generate 1.32% return on investment over 90 days.

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

Xtrackers ShortDAX  vs.  Jardine Matheson Holdings

Xtrackers ShortDAX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Jardine Matheson Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jardine Matheson Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jardine Matheson may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xtrackers ShortDAX and Jardine Matheson

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

The idea behind Xtrackers ShortDAX and Jardine Matheson Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.