Correlation Between XLFS and DHDG
Can any of the company-specific risk be diversified away by investing in both XLFS and DHDG 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 XLFS and DHDG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLFS and DHDG, you can compare the effects of market volatilities on XLFS and DHDG 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 XLFS with a short position of DHDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLFS and DHDG.
Diversification Opportunities for XLFS and DHDG
Pay attention - limited upside
The 3 months correlation between XLFS and DHDG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XLFS and DHDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHDG and XLFS 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 XLFS are associated (or correlated) with DHDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHDG has no effect on the direction of XLFS i.e., XLFS and DHDG go up and down completely randomly.
Pair Corralation between XLFS and DHDG
If you would invest (100.00) in DHDG on January 24, 2024 and sell it today you would earn a total of 100.00 from holding DHDG or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLFS vs. DHDG
Performance |
| Timeline |
| XLFS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DHDG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
XLFS and DHDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLFS and DHDG
The main advantage of trading using opposite XLFS and DHDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLFS position performs unexpectedly, DHDG 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 DHDG will offset losses from the drop in DHDG's long position.| XLFS vs. Virtus InfraCap Preferred | XLFS vs. XAI Octagon Floating | XLFS vs. Amplify High Income | XLFS vs. Triplepoint Venture Growth |
| DHDG vs. Vanguard Total Stock | DHDG vs. SPDR SP 500 | DHDG vs. iShares Core SP | DHDG vs. Vanguard Total Bond |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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