Correlation Between Xtrackers ShortDAX and Penta-Ocean Construction

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

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

Diversification Opportunities for Xtrackers ShortDAX and Penta-Ocean Construction

-0.83

Correlation Coefficient

Xtrackers ShortDAX  Penta-Ocean Construction

Pay attention - limited upside

The 3 months correlation between Xtrackers and Penta-Ocean is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta-Ocean Construction 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 Penta-Ocean Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta-Ocean Construction has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Penta-Ocean Construction go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and Penta-Ocean Construction

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Penta-Ocean Construction. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.01 times less risky than Penta-Ocean Construction. The etf trades about -0.12 of its potential returns per unit of risk. The Penta Ocean Construction Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  488.00  in Penta Ocean Construction Co on April 25, 2025 and sell it today you would earn a total of  47.00  from holding Penta Ocean Construction Co or generate 9.63% 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.  Penta Ocean Construction Co

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.

Penta-Ocean Construction

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penta-Ocean Construction may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xtrackers ShortDAX and Penta-Ocean Construction

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

The idea behind Xtrackers ShortDAX and Penta Ocean Construction Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.