Correlation Between DAX Index and Floor Decor
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By analyzing existing cross correlation between DAX Index and Floor Decor Holdings, you can compare the effects of market volatilities on DAX Index and Floor Decor 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 Floor Decor. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Floor Decor.
Diversification Opportunities for DAX Index and Floor Decor
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAX and Floor is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Floor Decor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floor Decor Holdings 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 Floor Decor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floor Decor Holdings has no effect on the direction of DAX Index i.e., DAX Index and Floor Decor go up and down completely randomly.
Pair Corralation between DAX Index and Floor Decor
Assuming the 90 days trading horizon DAX Index is expected to generate 1.46 times less return on investment than Floor Decor. But when comparing it to its historical volatility, DAX Index is 4.12 times less risky than Floor Decor. It trades about 0.5 of its potential returns per unit of risk. Floor Decor Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 9,550 in Floor Decor Holdings on September 13, 2024 and sell it today you would earn a total of 950.00 from holding Floor Decor Holdings or generate 9.95% 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. Floor Decor Holdings
Performance |
| Timeline |
DAX Index and Floor Decor Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Floor Decor Holdings
Pair trading matchups for Floor Decor
Pair Trading with DAX Index and Floor Decor
The main advantage of trading using opposite DAX Index and Floor Decor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Floor Decor 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 Floor Decor will offset losses from the drop in Floor Decor's long position.| DAX Index vs. Consolidated Communications Holdings | DAX Index vs. Spirent Communications plc | DAX Index vs. Gamma Communications plc | DAX Index vs. CITIC Telecom International |
| Floor Decor vs. The Home Depot | Floor Decor vs. The Home Depot | Floor Decor vs. LESLIES INC DL | Floor Decor vs. HORNBACH Baumarkt AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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