Correlation Between DAX Index and 10X GENOMICS

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Can any of the company-specific risk be diversified away by investing in both DAX Index and 10X GENOMICS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DAX Index and 10X GENOMICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAX Index and 10X GENOMICS DL, you can compare the effects of market volatilities on DAX Index and 10X GENOMICS 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 10X GENOMICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and 10X GENOMICS.

Diversification Opportunities for DAX Index and 10X GENOMICS

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between DAX and 10X is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and 10X GENOMICS DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X GENOMICS DL 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 10X GENOMICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X GENOMICS DL has no effect on the direction of DAX Index i.e., DAX Index and 10X GENOMICS go up and down completely randomly.
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Pair Corralation between DAX Index and 10X GENOMICS

Assuming the 90 days trading horizon DAX Index is expected to generate 0.13 times more return on investment than 10X GENOMICS. However, DAX Index is 7.9 times less risky than 10X GENOMICS. It trades about 0.0 of its potential returns per unit of risk. 10X GENOMICS DL is currently generating about -0.1 per unit of risk. If you would invest  1,932,493  in DAX Index on August 29, 2024 and sell it today you would lose (2,895) from holding DAX Index or give up 0.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

DAX Index  vs.  10X GENOMICS DL

 Performance 
       Timeline  

DAX Index and 10X GENOMICS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DAX Index and 10X GENOMICS

The main advantage of trading using opposite DAX Index and 10X GENOMICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, 10X GENOMICS 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 10X GENOMICS will offset losses from the drop in 10X GENOMICS's long position.
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The idea behind DAX Index and 10X GENOMICS DL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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