Correlation Between Arrow Electronics and DAX Index
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By analyzing existing cross correlation between Arrow Electronics and DAX Index, you can compare the effects of market volatilities on Arrow Electronics and DAX Index 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 Arrow Electronics with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and DAX Index.
Diversification Opportunities for Arrow Electronics and DAX Index
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arrow and DAX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and DAX Index go up and down completely randomly.
Pair Corralation between Arrow Electronics and DAX Index
Assuming the 90 days horizon Arrow Electronics is expected to under-perform the DAX Index. In addition to that, Arrow Electronics is 2.1 times more volatile than DAX Index. It trades about 0.0 of its total potential returns per unit of risk. DAX Index is currently generating about 0.12 per unit of volatility. If you would invest 1,784,285 in DAX Index on December 2, 2024 and sell it today you would earn a total of 470,858 from holding DAX Index or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. DAX Index
Performance |
| Timeline |
Arrow Electronics and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Arrow Electronics
Pair trading matchups for Arrow Electronics
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Arrow Electronics and DAX Index
The main advantage of trading using opposite Arrow Electronics and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Arrow Electronics vs. American Airlines Group | Arrow Electronics vs. AEGEAN AIRLINES | Arrow Electronics vs. Strategic Education | Arrow Electronics vs. EMBARK EDUCATION LTD |
| DAX Index vs. Ross Stores | DAX Index vs. National Retail Properties | DAX Index vs. Fast Retailing Co | DAX Index vs. Gol Intelligent Airlines |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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