Correlation Between Xtrackers LevDAX and CIG PANNONIA

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

By analyzing existing cross correlation between Xtrackers LevDAX and CIG PANNONIA LIFE, you can compare the effects of market volatilities on Xtrackers LevDAX and CIG PANNONIA 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 LevDAX with a short position of CIG PANNONIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and CIG PANNONIA.

Diversification Opportunities for Xtrackers LevDAX and CIG PANNONIA

0.76

Correlation Coefficient

Xtrackers LevDAX  CIG PANNONIA

Poor diversification

The 3 months correlation between Xtrackers and CIG is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and CIG PANNONIA LIFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIG PANNONIA LIFE and Xtrackers LevDAX 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 LevDAX are associated (or correlated) with CIG PANNONIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIG PANNONIA LIFE has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and CIG PANNONIA go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and CIG PANNONIA

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.01 times less return on investment than CIG PANNONIA. But when comparing it to its historical volatility, Xtrackers LevDAX is 1.69 times less risky than CIG PANNONIA. It trades about 0.22 of its potential returns per unit of risk. CIG PANNONIA LIFE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  76.00  in CIG PANNONIA LIFE on April 22, 2025 and sell it today you would earn a total of  19.00  from holding CIG PANNONIA LIFE or generate 25.0% return on investment over 90 days.

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

Xtrackers LevDAX  vs.  CIG PANNONIA LIFE

Xtrackers LevDAX

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Xtrackers LevDAX reported solid returns over the last few months and may actually be approaching a breakup point.

CIG PANNONIA LIFE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIG PANNONIA LIFE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, CIG PANNONIA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtrackers LevDAX and CIG PANNONIA

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

The idea behind Xtrackers LevDAX and CIG PANNONIA LIFE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.