Correlation Between Xtrackers ShortDAX and Media

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

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

Diversification Opportunities for Xtrackers ShortDAX and Media

-0.33

Correlation Coefficient

Xtrackers ShortDAX  Media

Very good diversification

The 3 months correlation between Xtrackers and Media is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Media go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Media

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.41 times more return on investment than Media. However, Xtrackers ShortDAX is 2.45 times less risky than Media. It trades about -0.02 of its potential returns per unit of risk. Media and Games is currently generating about -0.06 per unit of risk. If you would invest  54.00  in Xtrackers ShortDAX on April 24, 2025 and sell it today you would lose (1.00) from holding Xtrackers ShortDAX or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.33%
Values	Daily Returns

Xtrackers ShortDAX  vs.  Media and Games

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.

Media and Games

Risk-Adjusted Performance

Insignificant

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xtrackers ShortDAX and Media

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

The idea behind Xtrackers ShortDAX and Media and Games 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.