Correlation Between BGF Global and Xtrackers ShortDAX
Can any of the company-specific risk be diversified away by investing in both BGF Global 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 BGF Global and Xtrackers ShortDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Global Allocation and Xtrackers ShortDAX, you can compare the effects of market volatilities on BGF Global 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 BGF Global with a short position of Xtrackers ShortDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Global and Xtrackers ShortDAX.
Diversification Opportunities for BGF Global and Xtrackers ShortDAX
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGF and Xtrackers is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BGF Global Allocation and Xtrackers ShortDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers ShortDAX and BGF Global 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 BGF Global Allocation 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 BGF Global i.e., BGF Global and Xtrackers ShortDAX go up and down completely randomly.
Pair Corralation between BGF Global and Xtrackers ShortDAX
Assuming the 90 days trading horizon BGF Global Allocation is expected to generate 0.33 times more return on investment than Xtrackers ShortDAX. However, BGF Global Allocation is 3.03 times less risky than Xtrackers ShortDAX. It trades about -0.08 of its potential returns per unit of risk. Xtrackers ShortDAX is currently generating about -0.2 per unit of risk. If you would invest 7,588 in BGF Global Allocation on December 28, 2024 and sell it today you would lose (275.00) from holding BGF Global Allocation or give up 3.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
BGF Global Allocation vs. Xtrackers ShortDAX
Performance |
Timeline |
BGF Global Allocation |
Xtrackers ShortDAX |
BGF Global and Xtrackers ShortDAX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BGF Global and Xtrackers ShortDAX
The main advantage of trading using opposite BGF Global and Xtrackers ShortDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Global 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.BGF Global vs. Azvalor Global Value | BGF Global vs. JPM Global Natural | BGF Global vs. Cobas Global PP | BGF Global vs. Templeton Global AD |
Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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