Correlation Between Xtrackers LevDAX and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Intermediate Capital 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 Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Intermediate Capital Group, you can compare the effects of market volatilities on Xtrackers LevDAX and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Intermediate Capital.
Diversification Opportunities for Xtrackers LevDAX and Intermediate Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xtrackers and Intermediate is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Intermediate Capital go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Intermediate Capital
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.01 times less return on investment than Intermediate Capital. But when comparing it to its historical volatility, Xtrackers LevDAX is 1.26 times less risky than Intermediate Capital. It trades about 0.22 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,914 in Intermediate Capital Group on April 21, 2025 and sell it today you would earn a total of 506.00 from holding Intermediate Capital Group or generate 26.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers LevDAX vs. Intermediate Capital Group
Performance |
Timeline |
Xtrackers LevDAX |
Intermediate Capital |
Xtrackers LevDAX and Intermediate Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers LevDAX and Intermediate Capital
The main advantage of trading using opposite Xtrackers LevDAX and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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