Correlation Between Xtrackers LevDAX and PT Barito

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

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

Diversification Opportunities for Xtrackers LevDAX and PT Barito

0.0

Correlation Coefficient

Xtrackers LevDAX  PT Barito

Pay attention - limited upside

The 3 months correlation between Xtrackers and OB8 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and PT Barito Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Barito Pacific and Xtrackers LevDAX 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 LevDAX are associated (or correlated) with PT Barito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Barito Pacific has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and PT Barito go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and PT Barito

If you would invest  16,106  in Xtrackers LevDAX on February 23, 2024 and sell it today you would earn a total of  2,300  from holding Xtrackers LevDAX or generate 14.28% return on investment over 90 days.

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

Xtrackers LevDAX  vs.  PT Barito Pacific

Xtrackers LevDAX

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Xtrackers LevDAX reported solid returns over the last few months and may actually be approaching a breakup point.

PT Barito Pacific

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Xtrackers LevDAX and PT Barito

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

The idea behind Xtrackers LevDAX and PT Barito Pacific 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.