Correlation Between Xtrackers ShortDAX and TMBThanachart Bank

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

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

Diversification Opportunities for Xtrackers ShortDAX and TMBThanachart Bank

-0.39

Correlation Coefficient

Xtrackers ShortDAX  TMBThanachart Bank

Very good diversification

The 3 months correlation between Xtrackers and TMBThanachart is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and TMBThanachart Bank PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank PCL 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 TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank PCL has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and TMBThanachart Bank go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and TMBThanachart Bank

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the TMBThanachart Bank. In addition to that, Xtrackers ShortDAX is 1.48 times more volatile than TMBThanachart Bank PCL. It trades about -0.24 of its total potential returns per unit of risk. TMBThanachart Bank PCL is currently generating about 0.03 per unit of volatility. If you would invest  4.45  in TMBThanachart Bank PCL on December 27, 2024 and sell it today you would earn a total of  0.10  from holding TMBThanachart Bank PCL or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Xtrackers ShortDAX  vs.  TMBThanachart Bank PCL

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.

TMBThanachart Bank PCL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMBThanachart Bank PCL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TMBThanachart Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Xtrackers ShortDAX and TMBThanachart Bank

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

The idea behind Xtrackers ShortDAX and TMBThanachart Bank PCL 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.