Correlation Between Expat Serbia and Xtrackers

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

By analyzing existing cross correlation between Expat Serbia Belex15 and Xtrackers II , you can compare the effects of market volatilities on Expat Serbia and Xtrackers 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 Expat Serbia with a short position of Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Serbia and Xtrackers.

Diversification Opportunities for Expat Serbia and Xtrackers

-0.25

Correlation Coefficient

Expat Serbia  Xtrackers

Very good diversification

The 3 months correlation between Expat and Xtrackers is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Expat Serbia Belex15 and Xtrackers II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers II and Expat Serbia 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 Expat Serbia Belex15 are associated (or correlated) with Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers II has no effect on the direction of Expat Serbia i.e., Expat Serbia and Xtrackers go up and down completely randomly.

Pair Corralation between Expat Serbia and Xtrackers

Assuming the 90 days trading horizon Expat Serbia Belex15 is expected to generate 1.84 times more return on investment than Xtrackers. However, Expat Serbia is 1.84 times more volatile than Xtrackers II . It trades about 0.0 of its potential returns per unit of risk. Xtrackers II is currently generating about -0.07 per unit of risk. If you would invest  89.00  in Expat Serbia Belex15 on September 17, 2024 and sell it today you would lose (1.00) from holding Expat Serbia Belex15 or give up 1.12% of portfolio value over 90 days.

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

Expat Serbia Belex15  vs.  Xtrackers II

Expat Serbia Belex15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expat Serbia Belex15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Expat Serbia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Xtrackers II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers II has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xtrackers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Expat Serbia and Xtrackers

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

The idea behind Expat Serbia Belex15 and Xtrackers II 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.