Correlation Between DAX Index and SPROUTS FARMERS
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By analyzing existing cross correlation between DAX Index and SPROUTS FARMERS MKT, you can compare the effects of market volatilities on DAX Index and SPROUTS FARMERS 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 SPROUTS FARMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and SPROUTS FARMERS.
Diversification Opportunities for DAX Index and SPROUTS FARMERS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and SPROUTS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and SPROUTS FARMERS MKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPROUTS FARMERS MKT 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 SPROUTS FARMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPROUTS FARMERS MKT has no effect on the direction of DAX Index i.e., DAX Index and SPROUTS FARMERS go up and down completely randomly.
Pair Corralation between DAX Index and SPROUTS FARMERS
Assuming the 90 days trading horizon DAX Index is expected to generate 0.31 times more return on investment than SPROUTS FARMERS. However, DAX Index is 3.21 times less risky than SPROUTS FARMERS. It trades about 0.33 of its potential returns per unit of risk. SPROUTS FARMERS MKT is currently generating about -0.01 per unit of risk. If you would invest 1,962,645 in DAX Index on October 30, 2024 and sell it today you would earn a total of 165,573 from holding DAX Index or generate 8.44% 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. SPROUTS FARMERS MKT
Performance |
| Timeline |
DAX Index and SPROUTS FARMERS Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
SPROUTS FARMERS MKT
Pair trading matchups for SPROUTS FARMERS
Pair Trading with DAX Index and SPROUTS FARMERS
The main advantage of trading using opposite DAX Index and SPROUTS FARMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, SPROUTS FARMERS 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 SPROUTS FARMERS will offset losses from the drop in SPROUTS FARMERS's long position.| DAX Index vs. Ribbon Communications | DAX Index vs. Highlight Communications AG | DAX Index vs. Cairo Communication SpA | DAX Index vs. Spirent Communications plc |
| SPROUTS FARMERS vs. Align Technology | SPROUTS FARMERS vs. Easy Software AG | SPROUTS FARMERS vs. Charter Communications | SPROUTS FARMERS vs. ARROW ELECTRONICS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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