Correlation Between Xtrackers ShortDAX and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Kingdee International 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 ShortDAX and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Kingdee International Software, you can compare the effects of market volatilities on Xtrackers ShortDAX and Kingdee International 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 ShortDAX with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Kingdee International.
Diversification Opportunities for Xtrackers ShortDAX and Kingdee International
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Kingdee is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and Xtrackers ShortDAX 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 ShortDAX are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Kingdee International go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Kingdee International
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Kingdee International. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.91 times less risky than Kingdee International. The etf trades about -0.06 of its potential returns per unit of risk. The Kingdee International Software is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 209.00 in Kingdee International Software on March 9, 2024 and sell it today you would lose (114.00) from holding Kingdee International Software or give up 54.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Kingdee International Software
Performance |
Timeline |
Xtrackers ShortDAX |
Kingdee International |
Xtrackers ShortDAX and Kingdee International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Kingdee International
The main advantage of trading using opposite Xtrackers ShortDAX and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.Xtrackers ShortDAX vs. Hyster Yale Materials Handling | Xtrackers ShortDAX vs. IMPERIAL TOBACCO | Xtrackers ShortDAX vs. Hemisphere Energy Corp | Xtrackers ShortDAX vs. WILDPACK BEVERAGE INC |
Kingdee International vs. Palo Alto Networks | Kingdee International vs. Superior Plus Corp | Kingdee International vs. CITIUS RESOURCES LS 005 | Kingdee International vs. NMI Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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