Correlation Between DAX Index and Northland Power
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By analyzing existing cross correlation between DAX Index and Northland Power, you can compare the effects of market volatilities on DAX Index and Northland Power 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 Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Northland Power.
Diversification Opportunities for DAX Index and Northland Power
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and Northland is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power 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 Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of DAX Index i.e., DAX Index and Northland Power go up and down completely randomly.
Pair Corralation between DAX Index and Northland Power
Assuming the 90 days trading horizon DAX Index is expected to generate 0.25 times more return on investment than Northland Power. However, DAX Index is 4.07 times less risky than Northland Power. It trades about 0.13 of its potential returns per unit of risk. Northland Power is currently generating about 0.0 per unit of risk. If you would invest 1,590,133 in DAX Index on September 14, 2024 and sell it today you would earn a total of 450,459 from holding DAX Index or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
DAX Index vs. Northland Power
Performance |
| Timeline |
DAX Index and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Northland Power
Pair trading matchups for Northland Power
Pair Trading with DAX Index and Northland Power
The main advantage of trading using opposite DAX Index and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| DAX Index vs. CARSALESCOM | DAX Index vs. Sumitomo Mitsui Construction | DAX Index vs. H FARM SPA | DAX Index vs. Nufarm Limited |
| Northland Power vs. Dairy Farm International | Northland Power vs. SIEM OFFSHORE NEW | Northland Power vs. Martin Marietta Materials | Northland Power vs. Rayonier Advanced Materials |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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