Correlation Between Xtrackers ShortDAX and JPM Eurozone

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

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

Diversification Opportunities for Xtrackers ShortDAX and JPM Eurozone

-0.97

Correlation Coefficient

Xtrackers ShortDAX  JPM Eurozone

Pay attention - limited upside

The 3 months correlation between Xtrackers and JPM is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and JPM Eurozone Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Eurozone Research 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 JPM Eurozone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Eurozone Research has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and JPM Eurozone go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and JPM Eurozone

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the JPM Eurozone. In addition to that, Xtrackers ShortDAX is 2.47 times more volatile than JPM Eurozone Research. It trades about -0.2 of its total potential returns per unit of risk. JPM Eurozone Research is currently generating about 0.19 per unit of volatility. If you would invest  3,043  in JPM Eurozone Research on April 22, 2025 and sell it today you would earn a total of  292.00  from holding JPM Eurozone Research or generate 9.6% return on investment over 90 days.

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

Xtrackers ShortDAX  vs.  JPM Eurozone Research

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.

JPM Eurozone Research

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPM Eurozone Research are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, JPM Eurozone may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xtrackers ShortDAX and JPM Eurozone

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

The idea behind Xtrackers ShortDAX and JPM Eurozone Research 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.