Correlation Between Xtrackers LevDAX and PEPKOR

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

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

Diversification Opportunities for Xtrackers LevDAX and PEPKOR

0.81

Correlation Coefficient

Xtrackers LevDAX  PEPKOR

Very poor diversification

The 3 months correlation between Xtrackers and PEPKOR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and PEPKOR go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and PEPKOR

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.04 times more return on investment than PEPKOR. However, Xtrackers LevDAX is 1.04 times more volatile than PEPKOR LTD. It trades about 0.22 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.11 per unit of risk. If you would invest  22,390  in Xtrackers LevDAX on April 22, 2025 and sell it today you would earn a total of  5,995  from holding Xtrackers LevDAX or generate 26.78% 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.  PEPKOR LTD

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.

PEPKOR LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PEPKOR LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PEPKOR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Xtrackers LevDAX and PEPKOR

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

The idea behind Xtrackers LevDAX and PEPKOR LTD 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.