Correlation Between DAX Index and Northern Graphite
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By analyzing existing cross correlation between DAX Index and Northern Graphite, you can compare the effects of market volatilities on DAX Index and Northern Graphite 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 DAX Index with a short position of Northern Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Northern Graphite.
Diversification Opportunities for DAX Index and Northern Graphite
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAX and Northern is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Northern Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Graphite and DAX Index 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 DAX Index are associated (or correlated) with Northern Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Graphite has no effect on the direction of DAX Index i.e., DAX Index and Northern Graphite go up and down completely randomly.
Pair Corralation between DAX Index and Northern Graphite
Assuming the 90 days trading horizon DAX Index is expected to generate 18.77 times less return on investment than Northern Graphite. But when comparing it to its historical volatility, DAX Index is 27.33 times less risky than Northern Graphite. It trades about 0.12 of its potential returns per unit of risk. Northern Graphite is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6.08 in Northern Graphite on November 28, 2024 and sell it today you would earn a total of 1.48 from holding Northern Graphite or generate 24.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Northern Graphite
Performance |
| Timeline |
DAX Index and Northern Graphite Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Northern Graphite
Pair trading matchups for Northern Graphite
Pair Trading with DAX Index and Northern Graphite
The main advantage of trading using opposite DAX Index and Northern Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Northern Graphite 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 Northern Graphite will offset losses from the drop in Northern Graphite's long position.| DAX Index vs. TRAVEL LEISURE DL 01 | DAX Index vs. COLUMBIA SPORTSWEAR | DAX Index vs. InPlay Oil Corp | DAX Index vs. MAVEN WIRELESS SWEDEN |
| Northern Graphite vs. Canadian Utilities Limited | Northern Graphite vs. NTT DATA | Northern Graphite vs. DATAGROUP SE | Northern Graphite vs. Cass Information Systems |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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