Correlation Between PREMIER FOODS and DAX Index
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By analyzing existing cross correlation between PREMIER FOODS and DAX Index, you can compare the effects of market volatilities on PREMIER FOODS 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 PREMIER FOODS with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and DAX Index.
Diversification Opportunities for PREMIER FOODS and DAX Index
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PREMIER and DAX is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and PREMIER FOODS 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 PREMIER FOODS 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 PREMIER FOODS i.e., PREMIER FOODS and DAX Index go up and down completely randomly.
Pair Corralation between PREMIER FOODS and DAX Index
Assuming the 90 days trading horizon PREMIER FOODS is expected to under-perform the DAX Index. In addition to that, PREMIER FOODS is 2.76 times more volatile than DAX Index. It trades about -0.14 of its total potential returns per unit of risk. DAX Index is currently generating about 0.52 per unit of volatility. If you would invest 1,984,877 in DAX Index on October 24, 2024 and sell it today you would earn a total of 119,323 from holding DAX Index or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PREMIER FOODS vs. DAX Index
Performance |
| Timeline |
PREMIER FOODS and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
PREMIER FOODS
Pair trading matchups for PREMIER FOODS
DAX Index
Pair trading matchups for DAX Index
Pair Trading with PREMIER FOODS and DAX Index
The main advantage of trading using opposite PREMIER FOODS and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PREMIER FOODS 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.| PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc |
| DAX Index vs. United Natural Foods | DAX Index vs. Salesforce | DAX Index vs. Maple Leaf Foods | DAX Index vs. MUTUIONLINE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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