Correlation Between Xtrackers ShortDAX and IShares MSCI

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

By analyzing existing cross correlation between Xtrackers ShortDAX Daily and iShares MSCI EMU, you can compare the effects of market volatilities on Xtrackers ShortDAX and IShares MSCI 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 ShortDAX with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and IShares MSCI.

Diversification Opportunities for Xtrackers ShortDAX and IShares MSCI

0.0

Correlation Coefficient

Xtrackers ShortDAX  IShares MSCI

Pay attention - limited upside

The 3 months correlation between Xtrackers and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX Daily and iShares MSCI EMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI EMU and Xtrackers ShortDAX 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 ShortDAX Daily are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI EMU has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and IShares MSCI go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and IShares MSCI

If you would invest  879.00  in Xtrackers ShortDAX Daily on May 21, 2025 and sell it today you would earn a total of  4.00  from holding Xtrackers ShortDAX Daily or generate 0.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xtrackers ShortDAX Daily  vs.  iShares MSCI EMU

Xtrackers ShortDAX Daily

Risk-Adjusted Performance

Weakest

Over the last 90 days Xtrackers ShortDAX Daily has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xtrackers ShortDAX is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iShares MSCI EMU

Risk-Adjusted Performance

Weak

Over the last 90 days iShares MSCI EMU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares MSCI is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xtrackers ShortDAX and IShares MSCI

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

The idea behind Xtrackers ShortDAX Daily and iShares MSCI EMU 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.