Correlation Between Xtrackers LevDAX and GREEN PLAINS

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

By analyzing existing cross correlation between Xtrackers LevDAX and GREEN PLAINS RENEW, you can compare the effects of market volatilities on Xtrackers LevDAX and GREEN PLAINS 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 GREEN PLAINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and GREEN PLAINS.

Diversification Opportunities for Xtrackers LevDAX and GREEN PLAINS

-0.91

Correlation Coefficient

Xtrackers LevDAX  GREEN PLAINS

Pay attention - limited upside

The 3 months correlation between Xtrackers and GREEN is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and GREEN PLAINS RENEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREEN PLAINS RENEW 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 GREEN PLAINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREEN PLAINS RENEW has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and GREEN PLAINS go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and GREEN PLAINS

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 0.46 times more return on investment than GREEN PLAINS. However, Xtrackers LevDAX is 2.17 times less risky than GREEN PLAINS. It trades about 0.22 of its potential returns per unit of risk. GREEN PLAINS RENEW is currently generating about -0.21 per unit of risk. If you would invest  19,946  in Xtrackers LevDAX on December 22, 2024 and sell it today you would earn a total of  5,964  from holding Xtrackers LevDAX or generate 29.9% return on investment over 90 days.

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

Xtrackers LevDAX  vs.  GREEN PLAINS RENEW

Xtrackers LevDAX

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 17 (%) 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.

GREEN PLAINS RENEW

Risk-Adjusted Performance

Very Weak

Over the last 90 days GREEN PLAINS RENEW has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Xtrackers LevDAX and GREEN PLAINS

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

The idea behind Xtrackers LevDAX and GREEN PLAINS RENEW 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.