Correlation Between Xtrackers LevDAX and GREENX METALS

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Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and GREENX METALS 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 GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and GREENX METALS LTD, you can compare the effects of market volatilities on Xtrackers LevDAX and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and GREENX METALS.

Diversification Opportunities for Xtrackers LevDAX and GREENX METALS

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Xtrackers and GREENX is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and GREENX METALS go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and GREENX METALS

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the GREENX METALS. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 5.33 times less risky than GREENX METALS. The etf trades about -0.26 of its potential returns per unit of risk. The GREENX METALS LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  54.00  in GREENX METALS LTD on January 22, 2024 and sell it today you would lose (2.00) from holding GREENX METALS LTD or give up 3.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Xtrackers LevDAX  vs.  GREENX METALS LTD

 Performance 
       Timeline  
Xtrackers LevDAX 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Xtrackers LevDAX may actually be approaching a critical reversion point that can send shares even higher in May 2024.
GREENX METALS LTD 

Risk-Adjusted Performance

0 of 100

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

Xtrackers LevDAX and GREENX METALS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtrackers LevDAX and GREENX METALS

The main advantage of trading using opposite Xtrackers LevDAX and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.
The idea behind Xtrackers LevDAX and GREENX METALS LTD 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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