Correlation Between Xtrackers ShortDAX and Data3

Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Data3 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 Data3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers ShortDAX and Data3 Limited, you can compare the effects of market volatilities on Xtrackers ShortDAX and Data3 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 Data3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Data3.

Diversification Opportunities for Xtrackers ShortDAX and Data3

-0.56

Correlation Coefficient

Xtrackers ShortDAX  Data3

Excellent diversification

The 3 months correlation between Xtrackers and Data3 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Data3 Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 Limited 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 Data3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 Limited has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Data3 go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Data3

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Data3. In addition to that, Xtrackers ShortDAX is 1.14 times more volatile than Data3 Limited. It trades about -0.2 of its total potential returns per unit of risk. Data3 Limited is currently generating about 0.11 per unit of volatility. If you would invest  390.00  in Data3 Limited on April 22, 2025 and sell it today you would earn a total of  46.00  from holding Data3 Limited or generate 11.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Xtrackers ShortDAX  vs.  Data3 Limited

Xtrackers ShortDAX

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Data3 Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Data3 Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Data3 may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xtrackers ShortDAX and Data3

The main advantage of trading using opposite Xtrackers ShortDAX and Data3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Data3 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 Data3 will offset losses from the drop in Data3's long position.

The idea behind Xtrackers ShortDAX and Data3 Limited 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.