Correlation Between Xtrackers ShortDAX and Patterson Companies
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Patterson Companies 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 Patterson Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Patterson Companies, you can compare the effects of market volatilities on Xtrackers ShortDAX and Patterson Companies 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 Patterson Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Patterson Companies.
Diversification Opportunities for Xtrackers ShortDAX and Patterson Companies
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Patterson is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies 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 Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Patterson Companies go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Patterson Companies
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Patterson Companies. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 3.54 times less risky than Patterson Companies. The etf trades about -0.16 of its potential returns per unit of risk. The Patterson Companies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,960 in Patterson Companies on October 23, 2024 and sell it today you would earn a total of 1,020 from holding Patterson Companies or generate 52.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Patterson Companies
Performance |
Timeline |
Xtrackers ShortDAX |
Patterson Companies |
Xtrackers ShortDAX and Patterson Companies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Patterson Companies
The main advantage of trading using opposite Xtrackers ShortDAX and Patterson Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Patterson Companies 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 Patterson Companies will offset losses from the drop in Patterson Companies' long position.Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
Patterson Companies vs. Hanison Construction Holdings | Patterson Companies vs. Penta Ocean Construction Co | Patterson Companies vs. Nomad Foods | Patterson Companies vs. CAL MAINE FOODS |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |