Correlation Between Xtrackers LevDAX and VODAFONE GROUP
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and VODAFONE GROUP 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 VODAFONE GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and VODAFONE GROUP, you can compare the effects of market volatilities on Xtrackers LevDAX and VODAFONE GROUP 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 VODAFONE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and VODAFONE GROUP.
Diversification Opportunities for Xtrackers LevDAX and VODAFONE GROUP
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and VODAFONE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and VODAFONE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VODAFONE GROUP 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 VODAFONE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VODAFONE GROUP has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and VODAFONE GROUP go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and VODAFONE GROUP
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.17 times more return on investment than VODAFONE GROUP. However, Xtrackers LevDAX is 1.17 times more volatile than VODAFONE GROUP. It trades about 0.19 of its potential returns per unit of risk. VODAFONE GROUP is currently generating about 0.21 per unit of risk. If you would invest 23,410 in Xtrackers LevDAX on April 23, 2025 and sell it today you would earn a total of 4,925 from holding Xtrackers LevDAX or generate 21.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Xtrackers LevDAX vs. VODAFONE GROUP
Performance |
Timeline |
Xtrackers LevDAX |
VODAFONE GROUP |
Xtrackers LevDAX and VODAFONE GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers LevDAX and VODAFONE GROUP
The main advantage of trading using opposite Xtrackers LevDAX and VODAFONE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, VODAFONE GROUP 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 VODAFONE GROUP will offset losses from the drop in VODAFONE GROUP'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 |
VODAFONE GROUP vs. Apple Inc | VODAFONE GROUP vs. Apple Inc | VODAFONE GROUP vs. Apple Inc | VODAFONE GROUP vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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