Correlation Between Xtrackers ShortDAX and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Advanced Medical 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 Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Advanced Medical Solutions, you can compare the effects of market volatilities on Xtrackers ShortDAX and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Advanced Medical.
Diversification Opportunities for Xtrackers ShortDAX and Advanced Medical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Advanced is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Advanced Medical go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Advanced Medical
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Advanced Medical. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.32 times less risky than Advanced Medical. The etf trades about -0.2 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Advanced Medical Solutions on April 20, 2025 and sell it today you would earn a total of 30.00 from holding Advanced Medical Solutions or generate 14.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers ShortDAX vs. Advanced Medical Solutions
Performance |
Timeline |
Xtrackers ShortDAX |
Advanced Medical Sol |
Xtrackers ShortDAX and Advanced Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers ShortDAX and Advanced Medical
The main advantage of trading using opposite Xtrackers ShortDAX and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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