Correlation Between DFS Furniture and DAX Index
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By analyzing existing cross correlation between DFS Furniture PLC and DAX Index, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and DAX Index.
Diversification Opportunities for DFS Furniture and DAX Index
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DFS and DAX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and DAX Index go up and down completely randomly.
Pair Corralation between DFS Furniture and DAX Index
Assuming the 90 days trading horizon DFS Furniture PLC is expected to under-perform the DAX Index. In addition to that, DFS Furniture is 3.34 times more volatile than DAX Index. It trades about -0.13 of its total potential returns per unit of risk. DAX Index is currently generating about 0.41 per unit of volatility. If you would invest 2,021,619 in DAX Index on November 6, 2024 and sell it today you would earn a total of 121,205 from holding DAX Index or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. DAX Index
Performance |
| Timeline |
DFS Furniture and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
DFS Furniture PLC
Pair trading matchups for DFS Furniture
DAX Index
Pair trading matchups for DAX Index
Pair Trading with DFS Furniture and DAX Index
The main advantage of trading using opposite DFS Furniture and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. KENEDIX OFFICE INV | DFS Furniture vs. Cal Maine Foods | DFS Furniture vs. Moneysupermarket Group PLC | DFS Furniture vs. CAL MAINE FOODS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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