Correlation Between Xtrackers LevDAX and Amundi 3

Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Amundi 3 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 LevDAX and Amundi 3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers LevDAX and Amundi 3 Mois, you can compare the effects of market volatilities on Xtrackers LevDAX and Amundi 3 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 LevDAX with a short position of Amundi 3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Amundi 3.

Diversification Opportunities for Xtrackers LevDAX and Amundi 3

0.61

Correlation Coefficient

Xtrackers LevDAX  Amundi 3

Poor diversification

The 3 months correlation between Xtrackers and Amundi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Amundi 3 Mois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi 3 Mois and Xtrackers LevDAX 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 LevDAX are associated (or correlated) with Amundi 3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi 3 Mois has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Amundi 3 go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and Amundi 3

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 206.22 times more return on investment than Amundi 3. However, Xtrackers LevDAX is 206.22 times more volatile than Amundi 3 Mois. It trades about 0.13 of its potential returns per unit of risk. Amundi 3 Mois is currently generating about 1.41 per unit of risk. If you would invest  19,258  in Xtrackers LevDAX on October 22, 2024 and sell it today you would earn a total of  2,672  from holding Xtrackers LevDAX or generate 13.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Xtrackers LevDAX  vs.  Amundi 3 Mois

Xtrackers LevDAX

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Xtrackers LevDAX reported solid returns over the last few months and may actually be approaching a breakup point.

Amundi 3 Mois

Risk-Adjusted Performance

96 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi 3 Mois are ranked lower than 96 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Amundi 3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xtrackers LevDAX and Amundi 3

The main advantage of trading using opposite Xtrackers LevDAX and Amundi 3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Amundi 3 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 Amundi 3 will offset losses from the drop in Amundi 3's long position.

The idea behind Xtrackers LevDAX and Amundi 3 Mois 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .