Correlation Between Vanguard and Xtrackers ShortDAX
Can any of the company-specific risk be diversified away by investing in both Vanguard and Xtrackers ShortDAX 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 Vanguard and Xtrackers ShortDAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and Xtrackers ShortDAX Daily, you can compare the effects of market volatilities on Vanguard and Xtrackers ShortDAX 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 Vanguard with a short position of Xtrackers ShortDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Xtrackers ShortDAX.
Diversification Opportunities for Vanguard and Xtrackers ShortDAX
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and Xtrackers is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and Xtrackers ShortDAX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers ShortDAX Daily and Vanguard 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 Vanguard SP 500 are associated (or correlated) with Xtrackers ShortDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers ShortDAX Daily has no effect on the direction of Vanguard i.e., Vanguard and Xtrackers ShortDAX go up and down completely randomly.
Pair Corralation between Vanguard and Xtrackers ShortDAX
Assuming the 90 days trading horizon Vanguard is expected to generate 1.74 times less return on investment than Xtrackers ShortDAX. But when comparing it to its historical volatility, Vanguard SP 500 is 1.84 times less risky than Xtrackers ShortDAX. It trades about 0.06 of its potential returns per unit of risk. Xtrackers ShortDAX Daily is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 874.00 in Xtrackers ShortDAX Daily on May 31, 2025 and sell it today you would earn a total of 11.00 from holding Xtrackers ShortDAX Daily or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard SP 500 vs. Xtrackers ShortDAX Daily
Performance |
| Timeline |
| Vanguard SP 500 |
| Xtrackers ShortDAX Daily |
Vanguard and Xtrackers ShortDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and Xtrackers ShortDAX
The main advantage of trading using opposite Vanguard and Xtrackers ShortDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, Xtrackers ShortDAX 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 Xtrackers ShortDAX will offset losses from the drop in Xtrackers ShortDAX's long position.| Vanguard vs. Vanguard FTSE Emerging | Vanguard vs. Vanguard USD Emerging | Vanguard vs. Vanguard FTSE Developed | Vanguard vs. Vanguard FTSE Japan |
| Xtrackers ShortDAX vs. Xtrackers MSCI USA | Xtrackers ShortDAX vs. Xtrackers Plc | Xtrackers ShortDAX vs. Xtrackers MSCI AC | Xtrackers ShortDAX vs. Xtrackers MSCI World |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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