Correlation Between Xtrackers ShortDAX and Yancoal Australia
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Yancoal Australia 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 Yancoal Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Yancoal Australia, you can compare the effects of market volatilities on Xtrackers ShortDAX and Yancoal Australia 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 Yancoal Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Yancoal Australia.
Diversification Opportunities for Xtrackers ShortDAX and Yancoal Australia
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Yancoal is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Yancoal Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yancoal Australia 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 Yancoal Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yancoal Australia has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Yancoal Australia go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Yancoal Australia
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Yancoal Australia. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 2.28 times less risky than Yancoal Australia. The etf trades about -0.08 of its potential returns per unit of risk. The Yancoal Australia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Yancoal Australia on September 13, 2024 and sell it today you would earn a total of 106.00 from holding Yancoal Australia or generate 40.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Yancoal Australia
Performance |
Timeline |
Xtrackers ShortDAX |
Yancoal Australia |
Xtrackers ShortDAX and Yancoal Australia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Yancoal Australia
The main advantage of trading using opposite Xtrackers ShortDAX and Yancoal Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Yancoal Australia 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 Yancoal Australia will offset losses from the drop in Yancoal Australia's long position.Xtrackers ShortDAX vs. UBS Fund Solutions | Xtrackers ShortDAX vs. Xtrackers II | Xtrackers ShortDAX vs. Xtrackers Nikkei 225 | Xtrackers ShortDAX vs. iShares VII PLC |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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