Correlation Between Xtrackers and Apple
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Apple 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 and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and Apple Inc, you can compare the effects of market volatilities on Xtrackers and Apple 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 with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Apple.
Diversification Opportunities for Xtrackers and Apple
Poor diversification
The 3 months correlation between Xtrackers and Apple is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Xtrackers 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 II are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Xtrackers i.e., Xtrackers and Apple go up and down completely randomly.
Pair Corralation between Xtrackers and Apple
Assuming the 90 days trading horizon Xtrackers II is expected to under-perform the Apple. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers II is 8.93 times less risky than Apple. The etf trades about -0.24 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,954 in Apple Inc on January 17, 2024 and sell it today you would earn a total of 336.00 from holding Apple Inc or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers II vs. Apple Inc
Performance |
| Timeline |
| Xtrackers II |
| Apple Inc |
Xtrackers and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Apple
The main advantage of trading using opposite Xtrackers and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI | Xtrackers vs. Xtrackers Stoxx |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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