Correlation Between DAX Index and Nova Europe
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By analyzing existing cross correlation between DAX Index and Nova Europe ISR, you can compare the effects of market volatilities on DAX Index and Nova Europe 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 Nova Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Nova Europe.
Diversification Opportunities for DAX Index and Nova Europe
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Nova is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Nova Europe ISR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Europe ISR 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 Nova Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Europe ISR has no effect on the direction of DAX Index i.e., DAX Index and Nova Europe go up and down completely randomly.
Pair Corralation between DAX Index and Nova Europe
Assuming the 90 days trading horizon DAX Index is expected to generate 1.05 times more return on investment than Nova Europe. However, DAX Index is 1.05 times more volatile than Nova Europe ISR. It trades about 0.08 of its potential returns per unit of risk. Nova Europe ISR is currently generating about -0.04 per unit of risk. If you would invest 1,446,020 in DAX Index on September 4, 2024 and sell it today you would earn a total of 547,342 from holding DAX Index or generate 37.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
DAX Index vs. Nova Europe ISR
Performance |
| Timeline |
DAX Index and Nova Europe Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Nova Europe ISR
Pair trading matchups for Nova Europe
Pair Trading with DAX Index and Nova Europe
The main advantage of trading using opposite DAX Index and Nova Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Nova Europe 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 Nova Europe will offset losses from the drop in Nova Europe's long position.| DAX Index vs. LION ONE METALS | DAX Index vs. KENNAMETAL INC | DAX Index vs. HYATT HOTELS A | DAX Index vs. Zijin Mining Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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