Correlation Between VIIX and DBX ETF

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

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

Diversification Opportunities for VIIX and DBX ETF

0.0

Correlation Coefficient

VIIX  DBX ETF

Pay attention - limited upside

The 3 months correlation between VIIX and DBX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIIX and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust and VIIX 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 VIIX are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of VIIX i.e., VIIX and DBX ETF go up and down completely randomly.

Pair Corralation between VIIX and DBX ETF

If you would invest (100.00) in VIIX on December 26, 2024 and sell it today you would earn a total of  100.00  from holding VIIX or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VIIX  vs.  DBX ETF Trust

VIIX

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, VIIX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DBX ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days DBX ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, DBX ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VIIX and DBX ETF

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

The idea behind VIIX and DBX ETF Trust 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.