Correlation Between DAX Index and NOW
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By analyzing existing cross correlation between DAX Index and NOW Inc, you can compare the effects of market volatilities on DAX Index and NOW 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 NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and NOW.
Diversification Opportunities for DAX Index and NOW
Weak diversification
The 3 months correlation between DAX and NOW is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc 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 NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of DAX Index i.e., DAX Index and NOW go up and down completely randomly.
Pair Corralation between DAX Index and NOW
Assuming the 90 days trading horizon DAX Index is expected to generate 1.08 times less return on investment than NOW. But when comparing it to its historical volatility, DAX Index is 3.14 times less risky than NOW. It trades about 0.08 of its potential returns per unit of risk. NOW Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,200 in NOW Inc on September 3, 2024 and sell it today you would earn a total of 230.00 from holding NOW Inc or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. NOW Inc
Performance |
| Timeline |
DAX Index and NOW Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
NOW Inc
Pair trading matchups for NOW
Pair Trading with DAX Index and NOW
The main advantage of trading using opposite DAX Index and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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