Correlation Between Intel and Xtrackers ShortDAX

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

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

Diversification Opportunities for Intel and Xtrackers ShortDAX

0.58

Correlation Coefficient

Intel  Xtrackers ShortDAX

Very weak diversification

The 3 months correlation between Intel and Xtrackers is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Xtrackers ShortDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers ShortDAX and Intel 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 Intel are associated (or correlated) with Xtrackers ShortDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers ShortDAX has no effect on the direction of Intel i.e., Intel and Xtrackers ShortDAX go up and down completely randomly.

Pair Corralation between Intel and Xtrackers ShortDAX

Assuming the 90 days trading horizon Intel is expected to under-perform the Xtrackers ShortDAX. In addition to that, Intel is 2.94 times more volatile than Xtrackers ShortDAX. It trades about -0.28 of its total potential returns per unit of risk. Xtrackers ShortDAX is currently generating about -0.46 per unit of volatility. If you would invest  86.00  in Xtrackers ShortDAX on September 22, 2024 and sell it today you would lose (9.00) from holding Xtrackers ShortDAX or give up 10.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Intel  vs.  Xtrackers ShortDAX

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Xtrackers ShortDAX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Pair Trading with Intel and Xtrackers ShortDAX

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

The idea behind Intel and Xtrackers ShortDAX 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.