Correlation Between DAX Index and TRANSAT AT
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By analyzing existing cross correlation between DAX Index and TRANSAT AT VAR, you can compare the effects of market volatilities on DAX Index and TRANSAT AT 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 TRANSAT AT. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and TRANSAT AT.
Diversification Opportunities for DAX Index and TRANSAT AT
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and TRANSAT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and TRANSAT AT VAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSAT AT VAR 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 TRANSAT AT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSAT AT VAR has no effect on the direction of DAX Index i.e., DAX Index and TRANSAT AT go up and down completely randomly.
Pair Corralation between DAX Index and TRANSAT AT
Assuming the 90 days trading horizon DAX Index is expected to generate 0.3 times more return on investment than TRANSAT AT. However, DAX Index is 3.3 times less risky than TRANSAT AT. It trades about 0.13 of its potential returns per unit of risk. TRANSAT AT VAR is currently generating about -0.05 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 Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
DAX Index vs. TRANSAT AT VAR
Performance |
| Timeline |
DAX Index and TRANSAT AT Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
TRANSAT AT VAR
Pair trading matchups for TRANSAT AT
Pair Trading with DAX Index and TRANSAT AT
The main advantage of trading using opposite DAX Index and TRANSAT AT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, TRANSAT AT 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 TRANSAT AT will offset losses from the drop in TRANSAT AT's long position.| DAX Index vs. CARSALESCOM | DAX Index vs. Sumitomo Mitsui Construction | DAX Index vs. H FARM SPA | DAX Index vs. Nufarm Limited |
| TRANSAT AT vs. Playa Hotels Resorts | TRANSAT AT vs. Dalata Hotel Group | TRANSAT AT vs. Western Copper and | TRANSAT AT vs. Park Hotels Resorts |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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