Correlation Between DAX Index and Echiquier Major
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By analyzing existing cross correlation between DAX Index and Echiquier Major SRI, you can compare the effects of market volatilities on DAX Index and Echiquier Major 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 Echiquier Major. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Echiquier Major.
Diversification Opportunities for DAX Index and Echiquier Major
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Echiquier is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Echiquier Major SRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echiquier Major SRI 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 Echiquier Major. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echiquier Major SRI has no effect on the direction of DAX Index i.e., DAX Index and Echiquier Major go up and down completely randomly.
Pair Corralation between DAX Index and Echiquier Major
Assuming the 90 days trading horizon DAX Index is expected to generate 1.04 times more return on investment than Echiquier Major. However, DAX Index is 1.04 times more volatile than Echiquier Major SRI. It trades about 0.07 of its potential returns per unit of risk. Echiquier Major SRI is currently generating about 0.06 per unit of risk. If you would invest 1,505,830 in DAX Index on September 3, 2024 and sell it today you would earn a total of 456,815 from holding DAX Index or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
DAX Index vs. Echiquier Major SRI
Performance |
| Timeline |
DAX Index and Echiquier Major Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Echiquier Major SRI
Pair trading matchups for Echiquier Major
Pair Trading with DAX Index and Echiquier Major
The main advantage of trading using opposite DAX Index and Echiquier Major positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Echiquier Major 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 Echiquier Major will offset losses from the drop in Echiquier Major's long position.| DAX Index vs. SPORT LISBOA E | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. Live Nation Entertainment | DAX Index vs. Transport International Holdings |
| Echiquier Major vs. Echiquier Entrepreneurs G | Echiquier Major vs. Esfera Robotics R | Echiquier Major vs. R co Valor F | Echiquier Major vs. CM AM Monplus NE |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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